A report by Bitwise Asset Management forecasts that Bitcoin could significantly increase in value over the next decade, driven by rising institutional demand, scarce supply, and concerns over fiat currency debasement.
Reasons for Projected Bitcoin Growth
Bitwise expects Bitcoin to grow at 28.3% per year, potentially reaching $1.3 million per BTC by 2035. The growth is attributed to several factors, including potential institutional demand of $1 to $5 trillion and the fact that 94.8% of the total supply of 21 million BTC is already in circulation.
Supply and Demand Issues
The report highlights Bitcoin's strict scarcity as its total supply is capped at 21 million BTC, with 94.8% already circulated. Institutional investments are expected to face pressure due to rising demand and limited supply. Additionally, U.S. federal debt has risen by $13 trillion over the past five years, raising concerns about fiat currency devaluation.
Bitcoin Future Valuation Model
Bitwise employs a Total Addressable Market approach for estimating Bitcoin's future price, which encompasses potential markets that this asset could serve, such as jewelry investments and international remittances. The projected price for Bitcoin in 2035 is estimated to be $1,306,740, with a range from $88,005 to nearly $3 million per BTC.
In conclusion, the combination of institutional interest, limited supply, and rising concerns about currency depreciation positions Bitcoin as a valuable asset for long-term investment. However, it is important to note that current market conditions may differ from past cycles.
