Bitcoin (CRYPTO:BTC) has performed fantastically over the last year and a half – it is now up 299% since the start of 2023. That growth has slowed a bit as the crypto price is down 6% from its all-time high reached in March. The current price is approximately $69,400.

For those wondering if now is still a good time to buy the world’s most valuable cryptocurrency, I think Bitcoin will reach $150,000 by 2030, providing an annualized return of 14%.

Diminishing returns

It is important to recognize that Bitcoin’s future returns will likely be much lower than its monumental rise to its current level. This asset is no longer going unnoticed. Therefore, Bitcoin’s appreciation will likely slow down in the coming years.

But some prominent figures in the world of business and investment remain much more optimistic than I am. Cathie Wood and her team at Ark Invest think the price of Bitcoin could reach US$3.8 million by 2030. And Jack Dorsey, co-founder and CEO of Blockbelieves that Bitcoin will reach US$1 million by 2030.

In this context, my prediction of $150,000 by the end of the decade is a more moderate outlook, but it would be a gain that exceeds the S&P 500average return. Historically, this broad index of 500 of the largest and most profitable U.S. companies has produced annualized total returns of about 10%.

Growing demand

In my opinion, the key factor that will drive the price of Bitcoin is the simple fact that more market participants own it – individual and institutional investors, as well as companies and governments. Increased demand should, in theory, increase the price of Bitcoin in the long term.

But why would these market participants want to buy and hold Bitcoin?

Bitcoin’s fixed supply limit is probably the most important variable that makes it an attractive asset to own. Only 21 million coins will be created, and they are being minted at a pre-determined and ever-decreasing rate – strict limits that are built into Bitcoin’s software.

This is the completely opposite situation with traditional currency and tax systems. For example, let’s look at the worrying deficit the US government is running, leading to a growing federal debt burden. And we cannot forget the constant increase in the supply of US dollars, which causes the purchasing power of the dollar to decrease over time.

Bitcoin’s growth case largely depends on people gaining greater familiarity with it. This could take many years. But as we have seen, with a greater number of traditional financial firms painting Bitcoin in a positive light, there should be more buying interest.

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Mental preparation

My optimistic postulation that Bitcoin will reach $150,000 per coin by the end of the decade is far from a certainty. There is a lot of uncertainty, as is often the case with newer technologies.

For investors, the best way to approach this asset is to properly size your position in it. Don’t invest more money in Bitcoin than you are willing to lose. This could result in a person allocating you a relatively small portion of a well-diversified portfolio – perhaps 1%.

From a mental and emotional perspective, be prepared for this participation to experience a lot of volatility. In its brief history, Bitcoin has experienced multiple drops of more than 50%. Although its value may stabilize over time, such declines are still something an investor needs to be prepared for.

If you intend to buy Bitcoin, keep a long-term perspective. The main cryptocurrency is expected to continue to be a winner in the coming years, heading towards US$150,000.

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Neil Patel and its clients do not have a position in any of the stocks mentioned. The Motley Fool has positions and recommends Bitcoin and Block. The motley fool has a disclosure policy.

Prediction: Bitcoin will reach $150,000 in 2030 was originally published by The Motley Fool

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