This Cryptocurrency Could 10X by 2026

I’m sure you’ve heard by now about its huge returns Cryptocurrency market Produced. Produced. In 2021, the total value of these digital assets nearly tripled, and today the entire market is worth just over $2 trillion.

Bitcoin (CRYPTO: BTC)The world’s most valuable cryptocurrency ended 2021 with a 61% increase over the year. But huge gains can still be made in the future. Even ARK Investment Management CEO Cathy Wood believes that Bitcoin, which was worth about $43,000 as of January 6, will Exceeding the $500,000 mark in 2026.

Let’s dive into what should happen to the top cryptocurrency to rise tenfold over the next five years.

Image source: Getty Images.

Bitcoin becomes ‘digital gold’

The current value of all the gold in the world is just over $9 trillion. Based on Bitcoin’s market capitalization of nearly $800 billion, if the cryptocurrency truly becomes what many investors and speculators believe it to be – “digital gold” – it’s not hard to believe that its value can come close to the precious metal. Both suffer from scarcity, as there is only a limited amount of gold in the earth’s crust and there will be only 21 million bitcoins. Bitcoin cannot be used in electronics or worn as jewelry, but it can be easily owned or transferred. For proponents of “digital gold” seeking an efficient store of value, bitcoin could be the answer.

According to Kathy Wood, if institutional investors allocate 5% of their investment portfolios to Bitcoin, it could be worth up to $500,000. The probability of this happening is anyone’s guess, and it will certainly depend on its volatility dropping significantly, but there are signs that investor interest is increasing.

There are actually many funds traded on the Bitcoin exchange available. and investment bank Goldman Sachs It even has a dedicated Bitcoin trading desk. These developments reduce friction for institutional engagement. The allure of owning Bitcoin, or any cryptocurrency for that matter, is that it is not tied to other financial assets. As a result, it can add a level of diversification to portfolios.

Then there is the possibility that companies will move a portion of any cash on their balance sheets into Bitcoin, like what to forbidAnd micro . strategy, And Tesla I did. If this trend continues, it will certainly provide support for the bitcoin price rally in the coming years.

Bitcoin interest rises

Another argument as to why bitcoin will rise tenfold by 2026 is that its usefulness could increase. While we in the United States may take our advanced payments system and financial services for granted, citizens of developing countries have a different perspective.

El Salvador is a perfect example of how useful Bitcoin can be. Remittances make up a quarter of its GDP, but sending money home requires an average fee of close to 3% per transaction. Bitcoin offers low fees (or none) for sending payments across borders, which means hundreds of millions of dollars can be freed up to instantly improve the lives of people in El Salvador. Central America also recently I submitted a legal tender for cryptocurrency, a model that other countries could soon follow.

Jack Dorsey, CEO of Block, considers Bitcoin the most important thing to work on during his life. His company has two initiatives, TBD and Spiral, that aim to build tools and infrastructure, such as a decentralized exchange for converting fiat currencies into Bitcoin, as well as improving wallet functionality, to meaningfully improve the Bitcoin user experience.

And Coinbase Global, the leading digital currency brokerage and exchange in the United States, has an overarching mission to create and advance the crypto economy. It is clear that some of today’s brightest entrepreneurs are working to bring cryptocurrency to the masses. As the world’s most valuable cryptocurrency, Bitcoin should naturally benefit as it will likely be the first public exposure to this emerging asset class.

Over the past five years, Bitcoin has risen an astonishing 4,800%. A tenfold jump in the next five years equates to a total return of 900%, or 58% year-over-year. That’s a massive rate of return that would crush the broader stock market. However, this still represents a significant slowdown from Bitcoin’s previous performance.

No doubt there will be ups and downs along the way. This is the price we have to pay for great returns. But based on the arguments I mentioned above, I believe there is a potential for Bitcoin to increase tenfold by 2026.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of the Motley Fool Premium Consulting Service. We are diverse! Asking about an investment thesis — even if it’s our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.