Over the past seven months, Bitcoin has traded between $73,777 and $49,000, which has significantly dampened market sentiment. In a fresh analysis published via X, Will Clemente III, co-founder of Reflexivity Research, addresses a sense of impatience and uncertainty prevailing among investors, which explains why he remains bullish.

Clemente’s bullish sentiment is based on a long-term view of the next decade. Drawing on his expertise in portfolio construction and asset allocation, Clemente emphasized the importance of identifying major 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 I’d rather go into a coma for 10 years and hold than Bitcoin,” Clemente said, emphasizing his belief that Bitcoin is a better long-term asset.

His analysis is based on predicting certain macroeconomic trends. Clemente suggests that investors consider what the biggest trends are likely to be over the next decade and adjust their portfolios accordingly. This involves significantly increasing their investment in the most plausible trend or spreading their investment across several promising trends based on their potential impact.

Personally, he prefers to focus on the most likely trend, which he identifies as a continued rise in the U.S. deficit and the subsequent need for the government to devalue the currency to service that debt. This scenario, Clemente says, offers a more predictable outcome than other technology trends, such as AI or space exploration.

“Compared to other tech trends, the one about depreciation is pure math. Furthermore, the way to bet on other tech trends, like AI or space, is not as clear-cut as depreciation, given that there is no way to position yourself for it as clearly as you do for Bitcoin,” Clemente writes.

How high could the value of bitcoin go in 10 years?

Clemente’s bullish stance on Bitcoin is bolstered 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 about $460 billion in fresh investment in BTC, potentially doubling its market capitalization and pushing prices to $150,000–$200,000 per Bitcoin.

He further speculates on the impact of the increased allocation, suggesting that if deficit concerns intensify, these institutions could allocate as much as 3%, which would translate to $1.4 trillion flowing into Bitcoin. And the potential for growth is even greater. “What happens if that eats up $10-15 trillion of gold’s monetary premium? What about the total monetary premium in treasuries/stocks/real estate that is currently parked in these assets as SoVs to protect against currency depreciation?” Clemente wondered.

Summarizing his analysis, Clemente argued that a $1 million Bitcoin price by 2034 is not out of the realm of possibility, given the reduced purchasing power of the dollar. “I would also like to add that this does not take into account the fact that dollars will be worth much less in the future due to depreciation, so $1 million BTC in 2034 is not as crazy as $1 million BTC in 2024,” the analyst noted.

Clemente did admit, however, that “I think Bitcoin’s days of 100%+ CAGR are over, but that doesn’t mean it won’t outperform stock indices by a significant margin — and given the level of confidence, I don’t see anything else in the market that’s as compelling today.”

At the time of going to press, the BTC price was $56,481.

Featured image created with DALL.E, chart from TradingView.com