This article is available in Spain.
Over the past seven months, the price of Bitcoin has ranged between $73,777 and $49,000, causing much disappointment across the market. In a new analysis published via X, Reflexivity Research co-founder Will Clemente III said, Addresses Given the pervasive sense of impatience and uncertainty among investors, he explained why he is still optimistic.
Clemente’s bullish sentiment is driven by a long-term outlook over the next decade. Leveraging his expertise in portfolio construction and asset allocation, Clemente emphasized the importance of identifying the major economic trends that will unfold over the next decade. “I’ve been thinking a lot about portfolio construction and position sizing lately. I keep coming back to the fact that there’s nothing I’d rather own than go into a coma and hold it for 10 years other than Bitcoin,” Clemente said. He emphasized his belief in Bitcoin as a superior long-term asset.
His analysis is based on the anticipation of certain macroeconomic trends. Clemente suggests that investors should consider what the biggest trends are likely to be over the next decade and adjust their portfolios accordingly. This involves either significantly increasing investments in the most promising trend or spreading investments across several promising trends based on their potential impact.
Related reading
He personally favors focusing on the most likely trend, which he identifies as the continued growth of the US deficit and the government’s need to devalue the currency to service this debt. According to Clemente, this scenario offers more predictable results than other technological trends such as AI or space exploration.
“Compared to other tech trends, devaluation is pure math,” Clemente writes. “In addition, betting on other tech trends, such as AI or space, is not as obvious as devaluation, since there is no way to position for it as clearly as Bitcoin.”
How high can bitcoin go in 10 years?
Clemente’s bullish stance on bitcoin is reinforced by his analysis of potential capital inflows from sovereign wealth and pension funds. He estimates that if these institutions invested just 1% of their capital in bitcoin, this would lead to around $460 billion in new investments in BTC, potentially doubling its market cap and pushing prices to between $150,000 and $200,000 per bitcoin.
He further speculated on the impact of the increase in allocations, suggesting that if concerns over deficits grow, these institutions could allocate up to 3%, meaning that $1.4 trillion would be invested in Bitcoin. And the upside potential is even greater. “What if it eats up the $10t-$15t monetary premium of gold? How about the combined monetary premium in Treasuries/equities/real estate that is currently parked in these assets as SoV to protect against currency devaluation?” Clemente pondered.
Related reading
Concluding his analysis, Clemente argued that it is not impossible for Bitcoin to be worth $1 million by 2034 when the dollar’s decreasing purchasing power is taken into account. “Also I would add that this doesn’t take into account the fact that the dollar will drop significantly in value in the future, so $1 million BTC in 2034 is not as crazy as $1 million BTC in 2024,” the analyst commented.
However, Clemente also admitted, “I think Bitcoin’s 100%+ CAGR days are gone, but that doesn’t mean it won’t continue to vastly outperform equity indices – and on a confidence-adjusted basis, I don’t see anything attractive in the market today.”
At press time, BTC was trading at $56,481.
Featured image created by DALL.E, chart from TradingView.com
