Is Bitcoin a Millionaire-Creating Tool?

Bitcoin (Bitcoin) 0.34%) It has created many millionaires. The world’s leading cryptocurrency has soared 12,590% over the past decade. And that massive rally would have turned a modest $10,000 investment into $1.27 million. The same investment SNP500 The current value of the index fund would be around $28,000.

Bitcoin has taken the market by storm as it has grown from a niche token to a mainstream asset, tied to its own spot-price exchange-traded fund (ETF). It has been adopted as a national currency in El Salvador and the Central African Republic, and other countries suffering from inflation could follow suit in the coming years. So, can Bitcoin create more millionaires in the next decade? Let’s examine the long-term catalysts and challenges to find out.

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Why does Bitcoin price keep rising?

Bitcoin is mined using an energy-intensive “proof of work” (PoW) method that requires powerful Application Specific Integrated Circuit (ASIC) miners. The process becomes more difficult every four years with a “halving”, which cuts the mining reward in half. The supply of Bitcoin is also limited, with the last token expected to be mined by 2140.

These characteristics make Bitcoin more akin to precious metals like gold or silver than to other tokens that are “minted” (or rewarded via the less energy-intensive “proof of stake” (PoS) method) for creating new blocks on the blockchain.

That more solid foundation underpinned the decision by the U.S. Securities and Exchange Commission (SEC) to classify Bitcoin as the only cryptocurrency that can be considered a commodity rather than a security. That key distinction also underpinned the decision to approve the market’s first spot-price Bitcoin ETF before the SEC gave the green light to the first Bitcoin ETF. Ethereum (Ethereum) -0.63%)Two years ago, we switched from PoW to PoS.

Bitcoin’s price has seen massive volatility over the past four years. In 2020, it soared 322% as stimulus checks, social media buzz, and the growing popularity of cryptocurrency trading platforms attracted new investors. Bitcoin’s third halving in May 2020 further tightened supply. In 2021, the buying frenzy continued, sending the Bitcoin price soaring 47%.

But in 2022, Bitcoin prices plunged 48% as soaring interest rates pushed investors toward more conservative investments. That “crypto winter” dampened the idea that Bitcoin was a safe haven or a reliable hedge against inflation. In 2023, Bitcoin prices rose 31% as interest rates stabilized. That rally continued in 2024, with a 44% gain since the start of the year, driven by the approval of spot-rate ETFs in January, the fourth halving in April, and expectations of lower interest rates.

Can Bitcoin Make You More Millionaire?

While the recovery is impressive, long-term price targets for Bitcoin remain mixed. Social Capital’s Chamath Palihapitiya sees it hitting $500,000 by the end of 2025, Fidelity’s Jurrien Timmer sees it hitting $1 million by 2028-2030, and Ark Invest’s Cathie Wood claims it could hit a whopping $3.8 million by 2030.

We should take such bullish estimates with a grain of salt, but they are all based on long-term expectations of lower interest rates, more institutional Bitcoin buying, and greater adoption of Bitcoin as a reserve asset. Bulls also expect the next halving in 2028 to further tighten supply to meet rising demand.

But Bitcoin already has a market cap of $1.2 trillion, compared to silver’s $1.7 trillion and gold’s $17.5 trillion. If Bitcoin’s price goes from $60,000 to $500,000, its market cap will reach $10 trillion. If it hits $1 million, its market cap will reach $20 trillion, potentially surpassing gold as the world’s most valuable asset.

But that won’t happen unless the dollar and other fiat currencies experience a catastrophic crash that draws more investors into Bitcoin. Even if Bitcoin were to rise to $1 million over the next decade, your newly invested $10,000 would only turn into about $167,000. That would be a huge return, but it wouldn’t be anywhere near the millionaire returns of the past decade. Bitcoin could create more millionaires in the future, but they would have to invest more cash to achieve that goal, and they would likely see modest returns in the long run.