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Over the past seven months, Bitcoin has been in a range between $73,777 and $49,000, leading to a significant drop in market sentiment. In a new analysis published via X, Will Clemente III, co-founder of Reflexivity Research, said, Titles The prevailing sense of impatience and uncertainty among investors, explaining why he remains optimistic so far.
Clemente’s bullish sentiment is based on a long-term perspective over the next decade. Drawing on his experience in portfolio construction and asset allocation, Clemente emphasized the importance of identifying key economic trends that are likely to unfold over the next decade. “I’ve been thinking a lot about portfolio construction and position sizing lately. I keep coming back to the fact that there’s nothing better than going into a 10-year coma and holding on to Bitcoin,” Clemente said, emphasizing his confidence in Bitcoin as the best asset for the long term.
His analysis is based on forecasting specific macroeconomic trends. Clemente suggests that investors consider the larger trends that are likely to emerge over the next decade and adjust their portfolios accordingly. This involves either significantly increasing investment in the most confident trend or spreading investments across several promising trends based on their potential impact.
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He personally prefers to focus on the most likely trend, which he defines as the continued growth of the U.S. deficit and the subsequent need for the government to devalue the currency to service that debt. According to Clemente, this scenario offers a more predictable outcome than other technological trends such as artificial intelligence or space exploration.
“Compared to other technology trends, depreciation is just a calculation. Additionally, the way to bet on other technology trends, for example artificial intelligence or space, is not as straightforward as depreciation, since there is no way to clearly define its position like Bitcoin,” Clemente wrote.
How high could Bitcoin price go in 10 years?
Clemente’s bullish stance on bitcoin is reinforced by his analysis of potential capital inflows from sovereign wealth funds and pension funds. He estimates that if these entities allocated just 1% of their capital to bitcoin, it would lead to roughly $460 billion in new investments in bitcoin, potentially doubling its market cap and pushing prices to between $150,000 and $200,000 per bitcoin.
Clemente also speculates on the impact of increased allocation, noting that if deficit concerns escalate, these institutions could allocate as much as 3%, which would mean $1.4 trillion in Bitcoin. The upside potential is even greater. “What would happen if you eat up $10-15 trillion of the cash premium to gold? What about the cash premium pooled in Treasuries/stocks/real estate that is currently locked into these assets as a fixed value hedge against currency devaluation?”
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Concluding his analysis, Clemente concluded that a price of $1 million per Bitcoin by 2034 is not impossible when taking into account the low purchasing power of the dollar. The analyst added: “I would also like to add that this does not take into account the dollar depreciating significantly in the future due to its devaluation, so a price of $1 million in Bitcoin in 2034 is not as crazy as a price of $1 million in Bitcoin in 2024.”
However, Clemente also admitted, “I think Bitcoin’s days of 100%+ CAGR are over, but that doesn’t mean it won’t outperform equity indices by a lot — and on a confidence-adjusted basis, I don’t see anything compelling in the market today.”
At the time of publishing this report, BTC was trading at $56,481.
Featured image created using DALL.E, chart from TradingView.com
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