In the last six months, Shiba Inu ( SHIB 1.19%) investors have had a rough ride. While the meme token is still up 45,000,000% since bottoming out in November 2020, it has plummeted 70% from its highest peak in Oct. 2021. Despite that setback, SHIB still has over one million holders, and many of the investors are banking on burn projects and other stimuli to revitalize the price.
Although anything is possible, the meme coin lacks a competitive edge right now, and burning some of the tokens to make the remaining ones more valuable isn’t a long-term answer or a good investment thesis. As a result, I believe crypto investors should consider alternative assets.
Bitcoin ( BTC 1.90% ) is an excellent place to start. Here is why.
The investment thesis
Bitcoin’s bull case is simple: It was the first widely used cryptocurrency, and it still has a significant lead. In reality, Bitcoin has a market capitalization of $765 billion, accounting for 41% of all cryptocurrency values. More importantly, when demand for a limited resource rises, its value increases as well.
What is the maximum price of Bitcoin? It all hinges on demand. However, according to Ark Invest, Bitcoin’s market capitalization will be $28.5 trillion by 2030. If this occurs, each bitcoin would be worth roughly $1.36 million USD, implying a 33-fold increase over current prices of $41,000 per unit.
A $1 million price target
In a lengthy study, Ark reveals the reasons behind its $1 million prediction. Specifically, Bitcoin is expected to account for 5 percent of S&P 500 companies’ balance sheet cash in 2030, 2.5 percent of institutional assets, and 1 percent of overall nation-state reserves. While these precise figures are debatable, the underlying trends are well underway.
According to recent research from Fidelity, 71 percent of institutional investors intend to diversify into cryptocurrency in the future, up from 59% last year. 37% of institutions already own Bitcoin, making it the most popular crypto among organizations. Tesla and MicroStrategy have invested billions of dollars in Bitcoin, and several countries have invested in Bitcoin already.
Those are not the only factors at work, though. By 2030, Ark expects that high-net-worth investors and other retail traders will invest around $10 trillion in Bitcoin, with more developing economies adopting the currency as a medium of exchange, allowing it to compete in global settlement and remittance volumes. Once again, there’s a lot of speculation regarding specific figures, but the broader trends are already underway.
PayPal, Block, and Mercado Libre are just a few of the numerous fintech firms that provide digital wallets with Bitcoin trading support. Several cryptocurrency exchanges also provide debit cards that enable investors to spend their bitcoin in stores and online. The Coinbase card is an excellent illustration of this. Collectively, those technologies allow consumers to invest in (and pay for) Bitcoin without difficulty. As a result, Bitcoin settlement volume reached $13.1 trillion in 2021, surpassing Visa’s payment volume ($10.9 trillion).
The big picture
There is always a certain level of danger when putting money into an asset, and this is especially true with cryptocurrencies. Since its inception, the cryptocurrency market has been extremely unpredictable in terms of price fluctuations, and it has fallen by more than 50% on several occasions throughout the last few years.
However, Bitcoin is without a doubt the safest cryptocurrency on the market. Its first-mover advantage and widespread acceptance give it an edge over other digital assets. And Ark Invest has made a powerful case for why demand will rise in the future from this standpoint. From this viewpoint, Bitcoin appears to be a wise long-term investment for any risk-tolerant investor.