Bitcoin (CRYPTO: BTC) has garnered interest recently due to SEC approval and major asset managers' launch of spot exchange-traded funds. The asset has increased more than fourfold since 2023 (as of April 5), thanks to this, the imminent halving, and a positive market.
Similar story when zoomed out. Over the previous five years, few investments have surpassed Bitcoin's 1,210% rise (as of April 6). Where will the top cryptocurrency be in five years?
Obtaining financial legitimacy Over 15 years have passed since the Bitcoin whitepaper was released in late 2008. It's become a respectable financial asset despite its ups and downs. Spot ETFs were attracting huge investors like Ark Invest, firms like Block and MicroStrategy, and countries like El Salvador before their approval.
Bitcoin has regulatory approval now that these ETFs are available. This is promising. The large capital inflows in these ETFs show how much investor interest there is. This tendency is likely to continue as more individuals learn about Bitcoin. The list of financial services infrastructure supporting Bitcoin's adoption will grow, including custody solutions, payments systems, digital wallets, and other solutions we can't dream of.
The killer Bitcoin use case Bitcoin has performed well over the past four years. It rose 844%. It was a remarkable achievement given the coronavirus outbreak, inflation, increasing interest rates, and recessionary fears. Gold and U.S. Treasuries, the safest investments, have performed poorly in the last four years, when they should have done well.
This suggests Bitcoin's killer use case. More individuals are seeing it as a better store of wealth and investment potential for fixed-supply assets. I believe investors are warming up to the idea that Bitcoin can significantly increase their purchasing power over time, as it has in the past.
The future of Bitcoin as a payment method is unclear. I think its adoption as a currency is too questionable right now. I think its utility derives from being a more popular store of value, as we observe.
Rewarding investors I don't expect Bitcoin to repeat its past returns. This asset now has a market cap of $1.3 trillion, making such enormous early gains unlikely.
I think Bitcoin will keep rewarding its owners. In eight of the last 11 years, it led all asset classes in yearly returns. Bitcoin has huge upside potential over the next decade and beyond, even at all-time highs. While supply remains restricted, Bitcoin could rise in price due to capital movement. I'll be surprised if Bitcoin doesn't double in five years. However, I predict a considerably bigger return.
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