485: Bitcoin's Journey is Not Over

Bitcoin has been making headlines again as it surged past the $100,000 mark. If you've been following this podcast, you'll know I've been talking about Bitcoin since late 2016. Back then, its price hovered around $3,000 to $4,000, and that's when I truly started to believe in its potential. But what is Bitcoin, anyway? At its core, it's a type of digital money that doesn't rely on banks or governments. Instead, it's powered by blockchain technology—a public ledger that securely and transparently records every Bitcoin transaction. This technology makes Bitcoin decentralized, meaning no single person or entity has control over it. One of Bitcoin's standout features is its fixed supply. Unlike traditional currencies, which governments can print more of at will, Bitcoin is capped at 21 million coins—ever. This built-in scarcity makes Bitcoin similar to gold, but even more predictable because we know exactly how much exists now and how much will exist in the future. Right now, the total value of all Bitcoin—its market cap—is about $2 trillion. That might seem like a huge number, but it's small compared to other assets. For example, gold's total market value exceeds $12 trillion, and the U.S. stock market is worth around $50 trillion. Despite its rapid growth over the last decade, Bitcoin is still relatively small in the financial world. Why does this matter? Bitcoin is still in the early stages of adoption. Large investors, corporations, and even governments are only beginning to see its value. As more people and institutions buy into Bitcoin, its price is likely to rise, thanks to its fixed supply and growing demand. It's not unrealistic to imagine Bitcoin's market cap growing tenfold to $20 trillion over the next 5 to 7 years. While this might sound ambitious, consider that Wall Street has only started engaging with Bitcoin in the past year. Institutional exposure is almost certain to expand in the years ahead. But it's not just institutions. Surveys show that younger investors are more comfortable putting money into Bitcoin than in traditional markets. Think about the long-term implications of younger generations investing Bitcoin into their retirement accounts. So why am I sharing this with you? Back in 2016, I encouraged listeners to take Bitcoin seriously. A handful of you did, buying and holding onto Bitcoin—and you've seen $50,000 grow into more than $1 million. Do I think those kinds of returns are still possible? Not really. But I do see the potential for 10x growth in the not-too-distant future. If you're thinking about long-term investments, it might be worth grabbing some Bitcoin and simply holding onto it for the next five years. It's unlikely to make you as wealthy as early adopters, but it could be a strong way to grow wealth for a portion of your portfolio. If Bitcoin is new to you, I encourage you to spend time learning about it. This week's Wealth Formula Podcast is a great place to start. [00:00] Introduction to Bitcoin and Joe Kelly's Journey [18:32] Bitcoin as Digital Gold: Current Perspectives [24:31] Unchained: Securing Bitcoin Holdings [30:45] The Cost of Security: Is It Worth It? [36:26] The Future of Bitcoin Loans and Collateralization