As a seasoned analyst with over two decades of experience in the financial markets, I find Will Clemente III’s analysis thought-provoking and well-grounded. His long-term perspective and focus on identifying major economic trends resonate with me as they mirror my own approach to portfolio construction.
For the past seven months, Bitcoin‘s price has fluctuated between $73,777 and $49,000, causing a wave of pessimism within the market. In a recent analysis published through X, Will Clemente III, co-founder of Reflexivity Research, discusses the current feelings of impatience and doubt among investors while explaining why he continues to be optimistic about Bitcoin’s future
From a long-term viewpoint, Clemente’s optimistic outlook spans the next ten years. Leveraging his proficiency in portfolio design and investment strategies, Clemente underscored the relevance of pinpointing significant economic shifts expected to occur within that timeframe. In a recent discussion, he expressed strong conviction about Bitcoin, stating, “I’ve been pondering portfolios and positioning lately. There’s nothing I’d rather sleep on for a decade and hold than Bitcoin,” highlighting his belief in Bitcoin as the top choice for long-term investments
According to Clemente, his analysis is built upon the expectation of major economic trends that might unfold over the following ten years. He advises investors to identify these significant trends and make adjustments to their portfolios accordingly. This could mean either heavily investing in the trend with the highest certainty or diversifying investments across multiple promising trends based on their potential influence
As a researcher, I find myself drawn towards examining the most likely trend, which I perceive as the continuous expansion of the U.S. deficit. This expansion necessitates the government’s potential move to devalue its currency in order to manage this debt more easily. Compared to other technological advancements such as AI or space exploration, this scenario appears to offer a more reliable and predictable trajectory for analysis
“Compared to other technological trends, the debasement one is pure math. In addition, the way to bet on other technological trends, for example AI or space, isn’t as clear as debasement, given there’s not a way to position for it as clear as Bitcoin,” Clemente writes.
How High Can Bitcoin Go In 10 Years?
Clemente’s bullish stance on Bitcoin is reinforced by his analysis of potential capital inflows from sovereign wealth and pension funds. He estimates that if these entities were to allocate just 1% of their capital to Bitcoin, it would result in approximately $460 billion of new investments into BTC, potentially doubling its market cap and driving prices to between $150,000 and $200,000 per Bitcoin.
He further speculates on the impact of an increased allocation, suggesting that if concerns over the deficit intensify, these institutions might allocate as much as 3%, translating into $1.4 trillion entering Bitcoin. And the upside potential is even larger. “What happens if it eats into the $10t-$15t of gold’s monetary premium? How about the combined monetary premium in treasuries/equities/real estate that’s currently parked into these assets as SoV to protect against currency debasement?” Clemente pondered.
Summarizing his findings, Clemente suggested that reaching a price of $1 million for one Bitcoin by 2034 might be reasonable considering the potential decline in the dollar’s purchasing power. He further noted that this prediction doesn’t account for the possibility of the dollar being worth less in the future due to devaluation, implying that a $1 million Bitcoin price in 2034 might not seem as far-fetched if the dollar experiences significant debasement compared to current conditions
Clemente additionally admitted, “I believe Bitcoin’s era of more than 100% yearly growth has ended, but that doesn’t mean it won’t outshine equity indices significantly — and on a trust factor, I don’t find anything as attractive in the market right now.”
At press time, BTC traded at $56,481.
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2024-09-05 00:41