The market has had a volatile year, especially in April, largely due to the volatility caused by President Donald Trump's tariffs. No asset was spared, including the world's largest cryptocurrency Bitcoin (CRYPTO: BTC), which fell to a low of $75,000 in early April but has proven to be quite resilient, bouncing back to around $94,780 (as of April 28). Overall, Bitcoin has performed very well since Trump won the election in early November and has risen about 38% since then.
No one is more optimistic than Michael Saylor, co-founder and executive chairman of MicroStrategy (NASDAQ: MSTR), which is currently doing business under the name Strategy. Saylor believes that Bitcoin's momentum is just beginning to accelerate. In fact, Saylor believes Bitcoin could rise to $13 million per token over time. Here’s why.
In 2020, Saylor pivoted MicroStrategy's business, originally a business intelligence company, and began using all available cash to buy massive amounts of Bitcoin. Since then, Bitcoin has soared, as have MicroStrategy's stocks. Saylor has been able to tap the capital markets to raise funds that the company can use to buy more Bitcoin.
Success has made Saylor even more optimistic. He shocked the world last year when he said he thought Bitcoin could rise to $13 million per token. His argument was that he believed Bitcoin could generate an average annual return of 29% over the next 20 years, bringing the token to $13 million, implying a 13,616% increase from the current level. "Currently, we are at a 60% ARR, it will decelerate to 20% ARR over the next 21 years and the volatility will also decelerate," he said.
Since then, Saylor has not wavered. MicroStrategy has not only continued to buy Bitcoin at high prices, but in a recent interview, Saylor's comments suggest he remains as optimistic about Bitcoin as ever. He stated that Bitcoin would increase by 30% to 60% each year over the next 20 years. "... I bought it at $10,000. I will buy it in billions at $100,000. I will buy it at a million dollars and I will buy it at $10 million," Saylor said.
Despite increased uncertainty for investors, the regulatory environment has certainly improved significantly for cryptocurrencies since Trump took office. Previous regulators who took a stricter approach to cryptocurrency regulation have resigned or been pushed out. Trump has brought in pro-crypto officials as advisors and into his cabinet, and he even created a strategic Bitcoin reserve fund.
Recently, federal banking regulators have rolled back guidance that essentially required banks to exercise caution when interacting with cryptocurrencies and to seek permission from regulators before engaging in certain cryptocurrency-related activities. This is a clear acknowledgment to banks and traditional financial institutions that they can freely integrate cryptocurrencies into the mainstream financial system. Brokerage firms are also finding it easier to sell a wider range of cryptocurrencies.
Will Bitcoin reach $13 million?
I would definitely warn investors not to read too much into Saylor's bold $13 million prediction. It's unclear how he arrived at that annual return. Trying to predict a price target for a volatile asset like Bitcoin seems impossible.
However, I think investors could buy some Bitcoin for their portfolios, and it could serve as a decent diversification tool. With a limited supply of 21 million Bitcoin tokens, many believe that Bitcoin could act as a hedge against inflation or a form of digital gold, which has seen crazy price increases in recent years.
Furthermore, it remains unclear what will happen to the U.S. dollar under Trump's tariffs and considering the debt issues the U.S. government is facing. Historically, Bitcoin has had an inverse relationship with the dollar, as it was created as an alternative currency. For all these reasons, I believe investors could gain exposure to Bitcoin and it will rise higher over time. Whether it will reach nearly $13 million per token remains a huge guess.