IS $52 Million Dollar Bitcoin Possible?

Michael Saylor recently credited Bitcoin’s price slump to an “AI summer,” with fundraising and institutional capital moving out of Bitcoin and into artificial intelligence infrastructure.

Are astronomical predictions for the Bitcoin price still possible?

You’ve heard the million dollar BTC prediction. You’ve maybe even heard the $10 million dollar BTC predictions. And now, names in finance argue that BTC could rise to an astounding $50 million per coin.

Bitcoin could reach eight figure price per BTC by 2045 based on its inelasticity of its supply and the elasticity of supply in dominant fiat currencies, such as the US Dollar, Euro, yen, and renminbi. 

The Structural Drivers: Why Tens of Millions?

• Fiat Inelasticity vs. Scarce Supply: Central banks print fiat endlessly, whereas Bitcoin has a hard cap of 21 million coins.

• The Velocity Formula: VanEck applies monetary velocity rules, banking on BTC settling 10% of international trade.

• Gradual Deceleration: Saylor argues BTC’s current ~46% annualized gains will slowly cool to double the S&P 500’s growth rate. [5, 10, 12, 13, 16]

VanEck, which manages nearly $181 billion, predicts that Bitcoin could reach $52,386,207 by 2050. 

“We expect BTC to be widely used in international trade, becoming a significant medium of exchange and a valuable store of wealth,” reads the VanEck report penned by Matthew Sigel and Patrick Bush. “…[A]s BTC becomes more useful and valuable, central banks and long-term investors will want to hold more BTC, reducing the amount available in the floating supply.”  

Michael Saylor, Executive Chairman of Strategy, who thinks Bitcoin “keeps going up forever”, foresees Bitcoin potentially reaching $49 million per coin by 2045. His base prediction is that bitcoin will reach $13 million. 

“55% ARR [Annual Recurring Revenue] goes to 50% to 45% to 35% to 25%,” argues Saylor. “It’ll gradually decelerate until it’s growing about twice as fast as the S&P index. And at that rate, Bitcoin is $13 million a coin in the year 2045.”

Saylor focuses less on the devaluation of fiat currencies, and more on Bitcoin’s inelastic properties. Bitcoin is the one thing on Earth of which nobody can produce more, he argues. 

VanEck’s Real Targets (by 2050):

• Bear Case: $130,000
• Base Case: $2.9 million
• Bull Case: $52.4 million to $53.4 million 

Michael Saylor’s Real Targets (by 2045):

• Bear Case: $3 million
• Base Case: $13 million
• Bull Case: $49 million

Can Bitcoin Reach $50 Million?

Fiat currencies are losing value, including the US Dollar, Euro, GBP, and Yen. This is clear in the recent gold price action. VanEck cites the fact that “issuing nations have become less economically relevant and more fiscally irresponsible.” 

VanEck believes the trend “will persist and accelerate.” Moreover, the asset manager notes the seeming “erosion of property rights” in the U.S. damages the reputation, and contributes to the decline of the US Dollar. 

If international trade shifts away from fiat dominance, VanEck’s “hyper-bitcoinization” model assumes Bitcoin could capture up to 20% of global trade and 10% of domestic GDP. 

Bitcoin, meanwhile, is the only asset on the planet with perfect inelasticity. You can build more houses, mine more metals, create more stocks and bonds or print more currency. If a stock increases in price by enough, a company can issue more stock. You can’t mine more Bitcoin.

Bitcoin’s Inelasticity Key To Future Price 

Bitcoin’s value stems from inelastic supply. “Inelastic” in economics means a goods or service with a static quantity, even when its price changes. When the price of Bitcoin, for instance, goes up, the supply remains 21 million. When the price of Bitcoin drops, the supply remains the same. 

Bitcoin’s hard cap maximum supply gives it limited availability. It is the only truly finite resource in the world. The supply cannot be increased, no matter the price. Natural gas is often cited an example of a good with a highly inelastic supply. If prices increase, demand stays approximately the same and producers cannot supply more natural gas in short order. Nonetheless, producers can eventually scale up production. Bitcoin miners never can do so.

Miners can’t mine more Bitcoin. Miners also cannot mine bitcoin faster as the price rises, in order to make up for the increased demand. Bitcoin is hard-programmed to reach 21 million coins by 2140 or so based on mining algorithms. As the rate of new supply decreases, demand has generally steadily increased. 

Therefore, the Bitcoin supply is non-responsive to a change in price. If the formula for calculating the price elasticity of supply (PES) is PES = % Change in QS / % Change in Price. If PES is less than 1, supply is inelastic. Therefore, Bitcoin’s is effectively 0. 

Buying BTC is buying a ticket for a sold out theatre production. The inelastic supply of the ticket, due to the inelastic size of an a playhouse, means that demand can lead to the shortage. Perhaps there will be some on the secondary market.

The above-stated price predictions by VanEck and Michael Saylor on the high end. Each has a baser scenario. Van Eck’s base case is $2.9 million. Saylor’s is $3 million. Either way, these high prices are achieved due to Bitcoin’s perfectly inelastic supply.