Bitcoin in 2035: The Ultimate Store of Value or Digital Ghost Town?

Bitcoin's next decade will be a high-stakes battle between adoption and obsolescence. Here's where the smart money—and the reckless gamblers—are placing their bets.

The Bull Case: Digital Gold 2.0

Institutional adoption could catapult BTC past $500K as hedge funds and corporations treat it like a inflation-proof reserve asset. MicroStrategy's playbook becomes mainstream, and ETFs swallow supply whole.

The Bear Trap: Regulatory Guillotine

Governments might finally coordinate a global crackdown—taxing mining into oblivion while CBDCs undercut Bitcoin's utility. Remember when they called it 'too big to ban'? So was Napster.

The Wild Card: Black Swan Feast

A quantum computing breakthrough or Ethereum flipping BTC's market cap could rewrite the rules overnight. Crypto moves fast—just ask the 2017 ICO bagholders still waiting for their Lambos.

One thing's certain: Wall Street will take credit whether Bitcoin moons or crashes—their analysts have 'predicted' both outcomes 47 times already this year.

Image source: Getty Images.

Continuation of trends

Instead of trying to accurately predict the future, investors might be better served by looking at the present clearly. This perspective will make some trends stand out.

Bitcoin will continue to attract larger pools of capital. The launch of spot bitcoin ETFs provided a compliant way for hedge funds, sovereign wealth funds, pension funds, and endowments to all get in on the action.

The regulatory backdrop has gotten much more favorable for Bitcoin and the cryptocurrency industry. For instance, the WHITE House set up a Strategic Bitcoin Reserve. Other countries could adopt a friendly view, too.

Moreover, the ecosystem surrounding Bitcoin keeps expanding. It's not just related to payments, although there are exciting things happening in these areas, such as the lightning network. Within financial services, Bitcoin can now be used as collateral for mortgages.

is innovating when it comes to hardware. The fintech enterprise sells a user-friendly Bitcoin wallet called Bitkey. And under the Proto brand, it's developing equipment to support mining decentralization. Over time, there will surely be more companies building new products and services that boost Bitcoin's adoption.

Over the next decade, these notable trends are likely to continue, which should propel Bitcoin's price.

Bitcoin should keep rising

Bitcoin stands out among the sea of cryptocurrencies. And this will bode well for its future.

First, it's easily the most recognizable blockchain network on the planet. That's the result of being the first cryptocurrency, with the highest market cap. This leads to DEEP liquidity and a powerful network effect, where the addition of more stakeholders, like users, nodes, miners, and developers, makes Bitcoin more valuable over time.

Scarcity is Bitcoin's most important characteristic. Written in its software is a hard supply cap of 21 million units, with a pre-determined inflation rate that's enforced by a halving schedule.

The world is waking up, realizing how valuable it is to own something with a finite supply. In this way, Bitcoin is far superior to fiat currencies. Take the U.S. dollar, which is constantly being debased. In the past 15 years, the M2 money supply in the U.S., which counts physical cash in circulation and money in checking accounts and easily accessible savings accounts, has exploded from $8.6 trillion to $22 trillion. This trend has no end in sight.

Any investor who has a time horizon of at least a decade should consider having some of their diversified portfolio's assets allocated to Bitcoin. I'm confident that by 2035, the digital asset's price will be significantly higher. But to be clear, Bitcoin certainly won't register the same gain that it did in the past 10 years. As it becomes more mature, the potential upside will naturally diminish. 

Comparing Bitcoin to gold makes sense. The precious metal's market cap of $23.1 trillion is 10 times more valuable than Bitcoin's $2.3 trillion. I don't think it's unreasonable for the crypto to reach gold's value in 10 years. This would translate to a 25.9% annualized gain, much lower than Bitcoin's historical returns. However, this kind of return should easily outperform the stock market if it indeed comes to fruition.