The total value of all cryptocurrencies in circulation currently stands at $3.5 trillion, which is near a record high. Bitcoin (CRYPTO: BTC) accounts for more than half of that value, thanks to its market capitalization of almost $2 trillion.
Bitcoin has become a popular store of value for investors due to its decentralized nature, capped supply, and secure system called the blockchain. But Michael Saylor, who cofounded software company MicroStrategy, thinks it has the potential to remake the global financial system.
As a result, Saylor predicts Bitcoin could soar to $13 million per coin by the year 2045, which would translate to an eye-popping 13,031% gain for investors who buy it at the current price of about $99,000. But how realistic is that target?
Last year, the U.S. Securities and Exchange Commission (SEC) approved dozens of Bitcoin exchange-traded funds (ETFs), which provided individual and institutional investors with a safe, regulated way to own the cryptocurrency. It helped legitimize the view that Bitcoin is a real store of value, kind of like a digital version of gold.
Saylor believes Bitcoin is much more than that. He predicts a future where more than $500 trillion worth of real assets are “tokenized,” meaning their ownership rights (among other things) are moved onto the blockchain, replacing current systems of record keeping. The $500 trillion figure basically represents the value of every asset in the world — from every piece of real estate to every share in every company.
Since Bitcoin is truly decentralized and can’t be controlled or manipulated by any person or company, Saylor thinks it’s the perfect reserve asset for the tokenization process. It would be the currency people use when buying, selling, or transferring tokenized assets, which basically means everybody would have to own some Bitcoin to participate in this new financial system.
Saylor believes all of this could happen by the year 2045, and it would send Bitcoin from its current price of about $99,000 (as of this writing) to $13 million. The first step is to create a digital assets framework (a system of rules and laws), which he thinks might happen under the Trump administration. The incoming president is pro-crypto, and since his party now controls all three branches of government, this may offer an opportunity to get started on that enormous project.
Mathematically speaking, a price-per-Bitcoin of $13 million would give the cryptocurrency a market capitalization of about $257 trillion (based on Bitcoin’s current supply of 19.8 million coins). The total market capitalization of all 500 companies in the S&P 500 (SNPINDEX: ^GSPC) index now is $49.1 trillion, so Bitcoin would be worth five times more than that.