The supply of Bitcoin available for purchase is tougher than it looks.
Institutional investors and major companies are stacking up on crypto.
Some crypto industry executives are forecasting a spectacular price rise.
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Bitcoin (Cryptography: BTC) You don’t have to reinvent yourself to reach $1 million. It needs to continue to be scarce than today, with prices close to $95,000 per coin. While investors and institutions continue to emerge in new capital, their prices are more likely to rise than they fall in the long term, while new supply continues to be difficult. At least that’s what’s happening by more and more people in the crypto industry who think the $1 million milestone is closer than most expected.
Another famous prediction was made on May 1st. This time it was conducted by Andre Dragosch, Head of European Research at Bitwise Asset Management. Bitcoin expects to reach that target by 2029.
Source: Getty Images.
For each Bitcoin protocol, only 21 million coins have been mined. At present, about 94% of the supply potential has already been mined. After the protocol was recently halved in April 2024, the daily amount of new supplies created is just 450 Bitcoin.
But those numbers exaggerate the supply that is actually available for purchase. Approximately 20% of all Bitcoin are thought to be lost, forgotten or otherwise inaccessible due to losing Cryptowallet credentials. Meanwhile, the market includes the ongoing purchase of coins by the Ministry of Corporate Treasury, the asset managers of sponsorships of Exchange Transaction Funds (ETFs), and perhaps soon government. After all, the amount of Bitcoin that could be reasonably bought and sold in the open market will soon drop, and no large holders have publicly committed to withdrawing their positions any time soon.
And why is a floating supply of Bitcoin important if holders can choose to sell a portion of their coin to the market and increase it instantly? Because it is a float, and the total supply is not unpaid, and there is a tendency to raise prices in the actual market. If you are trying to buy something and almost no one is selling it, your only option is to offer to pay more and more until the owner is tempted to sell. The more this dynamic is maintained, the more pressure will be to adjust the price upwards. Additionally, Bitcoin ownership structures are increasingly concentrated on entities that are unlikely to sell.
The story continues
This element of the Bitcoin investment paper is not new, but it is becoming more difficult to ignore. As more circular supply is packed into long-term storage by players who hold rather than sell, the coins no longer look like speculative assets, and even if the comparison between the two is incomplete, they start to look like finite goods like gold.
If demand remains the same, that alone will support high prices in the long run, but if demand increases slightly, when the $1 million price tag starts to look tenable.
It’s fair to be skeptical of price targets that sound more like marketing than analysis. And it is important for investors to clearly recognize that when insiders in the crypto industry mention the Sky High price target, they almost always “speak books” (i.e. declare the assets they hold). A million dollars is a great round number, and the timeline provides a target date that is far enough to happen in the years between them. But in this case, the direction of the trip is more important than a particular target diagram.
You don’t need to do that much for Bitcoin to grind more and more high over the next few years. Whatever else happens, another half will occur in 2028, and then the new supply constraints will be dramatically tighter. As institutional investors, businesses and regular investors continue to accumulate assets over the course of the time, there are probably more sellers than buyers on average. With a long enough timetable — and it could be longer than just a few years — so it’s very likely that Bitcoin will cost more than $1 million.
It makes it an attractive purchase today.
Of course, this trend can become weaker or collapse. When regulators come face-to-face and return to a more restrictive stance in the code, it can significantly hinder adoption and even crater prices in the short term. Similarly, if global liquidity has dried up or Bitcoin has failed to permanently acquire a role in its institutional portfolio, the story could change quickly.
Therefore, if you purchase this coin, you need to maintain the mentality of the long-term holder rather than the trader. You don’t need it to reach a million dollar coin price. It’s only necessary to continue growing compared to when you purchased it, and the chances of it appear to be that the longer you hold it up, the better the more likely it is to hold it.
Consider this before purchasing inventory with Bitcoin.
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Alex Carchidi has a Bitcoin position. Motley Fool has a position and recommends Bitcoin. Motley Fools have a disclosure policy.
Here’s why many crypto industry insiders believe Bitcoin can reach $1 million by 2029:
