Bitcoin To Hit $1.4 Million By 2035 Due To Three-Pillar 'Asymmetric Risk Profile'

Core Viewpoint - Bitcoin's long-term investment thesis is transitioning from speculation to being recognized as a store of value, with projections suggesting it could reach $1.4 million by 2035 [1][4]. Store-Of-Value Model Drives $1.4 Million Target - Analysts from CF Benchmarks propose that Bitcoin will gradually assume part of gold's role as a store of value, supported by a framework that includes comparative valuation, production costs, and sensitivity to monetary liquidity [2]. - The current market for store-of-value assets is approximately $30 trillion, with gold being the predominant asset [2]. Market Capitalization Scenarios - Analysts modeled scenarios where Bitcoin captures between 17% and 33% of gold's market capitalization by 2035 [3]. Price Target and Returns - A probability-weighted analysis yields a base-case price target for Bitcoin of around $1.42 million, indicating potential annualized returns of about 30% [4]. Production Costs and Price Support - The report emphasizes rising production costs as a factor supporting Bitcoin's price over time, treating it similarly to a commodity like gold [6]. - Current estimates suggest it costs between $40,000 and $50,000 to mine one Bitcoin, with production becoming increasingly challenging due to halving events and rising mining difficulty [6]. Liquidity and Volatility Trends - Bitcoin's price is closely correlated with the global M2 money supply, which influences investment availability; typically, Bitcoin's price rises following increases in M2 [8]. - The report notes a trend of decreasing price volatility, with expectations that it will fall to around 28% by 2035, down from previous triple-digit levels [11]. Institutional Participation - Increased liquidity and institutional involvement are contributing to the reduction in volatility, with even small allocations to Bitcoin potentially enhancing portfolio returns [12]. Broader Industry Perspectives - Other industry leaders, including Coinbase's CEO and BitMEX co-founder, have echoed similar bullish projections for Bitcoin, with targets reaching $1 million by 2030 [13][14]. - The macroeconomic environment is seen as favorable for Bitcoin, with expanding liquidity and rising institutional comfort with digital assets [16]. Current Market Context - Bitcoin is currently approximately 30% below its all-time high of nearly $126,000, indicating a significant gap between long-term projections and the current market situation [17].