This Cryptocurrency Could Soar by 23,000% Over the Next 2 Decades, According to MicroStrategy's Michael Saylor

Although Bitcoin (CRYPTO: BTC) is sitting as of this writing almost 25% below its all-time high of $73,750 reached earlier this year, there are plenty of bullish crypto investors who are still convinced that Bitcoin will skyrocket over the long run. Among them is Michael Saylor, founder and executive chairman of MicroStrategy (NASDAQ: MSTR), who recently doubled down on his prediction that a single Bitcoin would be worth $13 million by the year 2045.

At last report, MicroStrategy owned 226,500 Bitcoins with a market value around $14 billion. It touts itself as "the largest corporate holder of bitcoin and the world’s first bitcoin development company." Bloomberg reported last month that Saylor himself owns about $1 billion worth of Bitcoins.

Based on Bitcoin's recent price of $55,000, a $13 million target represents an astronomical 23,000% return if you buy today and hold for the next two decades. Obviously, a lot has to happen for that to become a reality. Let's take a closer look.

Bitcoin's long-run performance

Yes, seeing a $13 million price tag for Bitcoin can induce a fair amount of sticker shock. But if you dig into the numbers, the math actually starts to make sense. And a lot of that has to do with the compounding power of money. If any asset is allowed to compound in value for a long period of time, the results have the potential to shock.

In the case of Bitcoin, it would require a compound annual growth rate (CAGR) of 30% for the magic to happen and it to jump from $55,000 now to $13 million in 2045. In other words, if Bitcoin can increase in value by 30% per year, for the next 21 years, an upfront investment of $55,000 would turn into $13 million.

And, while it may be unlikely, a CAGR of 30% for Bitcoin is not out of the question. From 2011 to 2021, Bitcoin delivered annualized returns of 230% per year. And Bitcoin returned approximately 150% in 2023. Already this year, Bitcoin is up more than 30%. Over the past five years, the only blemish was 2022, when Bitcoin fell nearly 65%.

So what can investors realistically expect? In an interview this month with CNBC, Saylor predicted that during the next two decades, Bitcoin's annual return would steadily fall over time, from about 44% a year to 40% to 35% to 30% to 25% to... well, you get the idea. The final long-run number for Bitcoin, says Saylor, would be the annual return of the S&P 500 plus an extra 8% to compensate investors for the extra risk.

At some point, of course, it's worth taking a moment to ponder what a price tag of $13 million really means for Bitcoin. Based on its current circulating coin supply of 20 million, that implies a future market cap of $260 trillion. That dwarfs the value of any tech stock today, and in fact, it dwarfs the value of the entire S&P 500, which today sits at around $45 trillion.