With Bitcoin (CRYPTO: BTC) surging past the $70,000 price level to set a new all-time high, crypto investors are naturally starting to wonder just how much higher it can go. Cathie Wood of Ark Invest is now predicting that Bitcoin could hit a price of $1 million before 2030, so there is a very real possibility that some of these investors could one day become crypto millionaires.
But does Bitcoin have the potential to be a billionaire-maker? In other words, by making a very modest investment in Bitcoin right now, is it ever possible that you could become a billionaire? Let's take a closer look at what would need to happen.
Bitcoin's historical returns
The starting point for considering Bitcoin's "billionaire-maker" potential is analyzing its historical returns. By just about any standard possible, these returns have been eye-popping. Considering that Bitcoin first broke through the $1 mark in February 2011, it is remarkable that Bitcoin is now trading around $70,000 just 13 years later.
The numbers are even more impressive when you stack them up against the performance of other asset classes. During the period from 2011 to 2021, Bitcoin was the single best-performing asset class in the world. During that time period, Bitcoin had annualized returns of 230% per year, compared to just 20% per year for high-growth tech stocks.
Obviously, there's danger in extrapolating too much from these numbers. After all, past performance is no guarantee of future performance. That being said, Bitcoin returned 150% last year, and is up another 70% this year. So while Bitcoin may no longer deliver the types of 230% annualized returns that it did during its heyday, it still has the potential to deliver tremendous potential upside.
Bitcoin future price predictions
With these historical returns as a starting point, it's then possible to consider just how much higher Bitcoin might go in the future. The one price prediction that everyone is talking about is the one made by Cathie Wood of Ark Invest. In early 2022, she predicted that Bitcoin would hit a future price of $1 million by the year 2030. She increased that prediction to $1.48 million in 2023, and then to $2.3 million in 2024.
During the peak of the last Bitcoin bull market rally, Jurrien Timmer, Director of Global Macro for Fidelity Investments, predicted that Bitcoin would hit a price of $1 billion by the year 2038. This is obviously a highly controversial prediction, but it does introduce a very tantalizing possibility: Invest just $72,000 today (the cost of a single bitcoin) and you could be a billionaire by the year 2038.