The future of Bitcoin has never looked more certain. In the 15 years since Bitcoin's inception, it has transformed from a niche experiment into a globally recognized financial asset. Today it serves as a digital store of value and a tool for decentralized finance. Tomorrow, it may become the reserve asset of the world.
While there are of course challenges in the road ahead for this to happen, such as regulation, environmental concerns and technological risks, this month we wanted to put those concerns aside and focus on the possibilities and potential that lies ahead. At only USD 0.1m per Bitcoin today, let’s imagine a future where Bitcoin fulfils its most ambitious promises.
Over the years, we have explored Bitcoin from nearly every angle. We have discussed the Bitcoin Halving in 2024, the arrival of the spot ETF, old and new Bitcoin narratives, the growth of the Bitcoin Lightning Network, emerging institutional adoption, the Bitcoin Halving in 2020, and the many flavours of Bitcoin. We have delved deeply into its technological underpinnings, how it works, and how it is perceived globally. Yet, one perspective remains largely unexplored—its future potential! For bitcoin to flip the market value of gold, “only” one last 10x is required. This would value the price of one bitcoin unit at around USD 1 million.
This month, we will explore three progressive outcomes for Bitcoin. We will examine the potential for Bitcoin to evolve into:
Bitcoin – the world’s global reserve asset
Bitcoin is better at being gold than gold. It is scarce with very limited supply, like gold. It is politically neutral and cannot be weaponized in trade wards or geopolitical disputes. It is transparent, trustworthy, always available, divisible and far cheaper and faster to transport and transact than gold. It will become the reserve asset for the 21st century and the digital age.
Global reserve assets are assets that are widely held by governments, central banks, and financial institutions. These assets act as a store of value, a medium of exchange, or a unit of account for settling international transactions. Reserve assets play a foundational role in the global financial system and some of their key characteristics include:
Two prominent examples of global reserve assets are gold and the US dollar. Gold served as the primary global reserve asset for centuries owing to its scarcity and universal acceptance. While gold has no, or very limited, intrinsic value such as certain industrial applications and jewelry, a social consensus has developed over the centuries that gold is a store of wealth. Then post-World War II, the US dollar became the dominant reserve asset. It was bolstered by the Bretton Woods system, its link to gold (until 1971), and the general strength of the US economy and US military.
Today bitcoin is the 7th largest asset by market value on the planet. It has significant market liquidity, regularly trading over USD100bn per day. It has gained substantial institutional adoption this year through the launch of the spot ETFs in the US, and it is now starting to gain adoption by governments. El Salvador became the first country to adopt bitcoin as legal tender in 2021, when the government started accumulating BTC. President-elect Trump has proposed establishing a national bitcoin reserve, aiming to acquire up to one million bitcoins, out of a total of 21 million bitcoin ever to exist, over five years. Other countries are following suit, with Russia, Brazil and even Bhutan looking to move towards holding bitcoin as a reserve asset.
If Bitcoin becomes the main global reserve asset of the world, there will be profound implications for global finance, economics, and geopolitics. It would transform the financial system as power would shift from centralized entities (like the US Federal Reserve) to a decentralized, borderless asset. This would reduce the influence of individual countries, such as the United States, whose currency dominates global reserves. Traditional reserve currencies like the US dollar and euro would face competition, weakening their dominance in international trade and finance.
Bitcoin becoming a prominent global reserve currency could have both a positive and negative impact. In the shorter term, this change to the financial system could lead to political instability. Countries may face challenges from diminished financial influence, potentially sparking international power struggles. However, over time this shift towards a politically neutral global reserve asset should be overwhelmingly positive for the world, reducing trade frictions. Nations will not rely on any one country’s currency, lowering geopolitical tensions tied to the influence of national currencies.
Bitcoin - the world’s payment system
As a company with offices in different regions of the world, we find the traditional banking system to be hugely frustrating. Sending a wire payment from Hong Kong to North America takes several days and can cost hundreds of USD, not to mention the fact that it can only be done during weekday working hours. Bitcoin is email for money. As with email, there are no “out of office” hours for Bitcoin and there is no concept of national borders. It seems inevitable to us that Bitcoin and digital assets will make up the backbone of the world’s payment architecture in the future.
Discussions have started about Bitcoin’s potential to become a global payment system and to some extent, this transformation is already underway. As of 2024, approximately 13% of online businesses accept Bitcoin and other digital assets, underscoring a growing shift toward decentralized payment solutions. The Bitcoin Lightning Network, a layer-2 technology focused on enhancing payments, is processing over 6m monthly transactions and boasts more than 1m active monthly users, demonstrating its real-world viability as a scalable payment infrastructure.
Bitcoin delivers fast, low-cost, and secure transactions at scale. From our experience, cross-border remittances are a compelling use case. According to the World Bank, global remittance fees average around 6%, costing billions annually, with much of this coming from low-income countries. Bitcoin enables cross-border transactions with reduced costs and near-instant settlement times, making it an ideal solution for remittances and rivaling traditional payment systems. The remittance market is Bitcoin’s gateway to being used more broadly in global payments. If people are receiving bitcoin and crypto in international transactions, then they are likely to be more open to using bitcoin for domestic transactions as well. Over time, Bitcoin can become the world’s payment system.
Bitcoin – the world’s money
This is the big one. By 2048, could bitcoin be the world’s dominant currency? Will we price other assets in BTC or satoshis (the smallest unit of a bitcoin) instead of in USD?
Bitcoin is uniquely positioned to become the world's dominant form of money. Unlike fiat currencies controlled by governments and central banks, Bitcoin operates on a trustless, peer-to-peer network, free from centralized control. Its universality and resistance to inflationary pressures make it an attractive candidate for a global monetary standard.
If bitcoin were to replace fiat currencies and become the world’s money, the implications would be profound. There would be huge benefits and cost efficiencies. Transactions would occur seamlessly across borders without the need for currency exchange, banks, or any intermediaries. Businesses would benefit from lower transaction costs, while individuals would gain access to a stable, non-inflationary store of value. Bitcoin's digital nature would also enable it to integrate with emerging technologies, enhancing its utility as a medium of exchange and unit of account.
On a societal level, bitcoin as the world’s money would radically alter the concept of economic sovereignty. Individuals would no longer rely on central banks or governments to manage the value of their money. In regions with unstable currencies or authoritarian regimes, bitcoin would provide a lifeline, offering financial independence and protection from oppressive economic policies. This shift could reduce inequality by granting billions of unbanked individuals access to the global economy. With a smartphone and internet connection, anyone could transact, save, or invest, breaking down barriers to financial inclusion.
Economically, a bitcoin-dominated world would mark the end of inflationary monetary policies. Central banks would lose control over monetary systems, as they are unable to create or manipulate bitcoin as they do with fiat currencies. Governments will no longer be able to print money to finance deficits, which would lead to more disciplined fiscal policy. While this might reduce debt-driven economic growth, it will also curb excessive monetary expansion, preventing future financial crises caused by over-leveraged systems. Recent economic challenges related to inflation will also become a thing of the past as society will be pegged to Bitcoin’s pre-programmed declining rate of inflation, that today is already less than 1% annually.
The transition to a bitcoin-denominated world will not be smooth. Firstly, there will be technological literacy gaps that will need to be plugged to prevent inequality between the techno literate and illiterate. Secondly, robust cybersecurity measures will be needed to protect digital assets. Thirdly, the economic power of nation states will be diluted, transferring sovereignty from governments to individuals. In this scenario, money becomes a tool of empowerment rather than a mechanism for state control, challenging the traditional role of centralized authorities in shaping economic and social policies. While this is a good thing for humanity in the long run, the nation state will likely revolt against its waning powers.
The real impact of bitcoin becoming the world’s money is in the redistribution of power, where individuals and communities make decisions independently of overarching state control. This endgame raises questions about governance, accountability, and the role of institutions in maintaining societal order. While Bitcoin's ascent to world money could democratize finance and protect individual freedoms, its success will depend on society's ability to navigate the complexities of a decentralized economic system.
Bitcoin as the world's money is a revolutionary concept. Regardless of whether it leads to greater empowerment and equality or introduces new global challenges, its trajectory will be one of the defining stories of our time.
From an investment perspective, if just a small portion of our above scenarios hold true, then bitcoin breaking USD1m per BTC is inevitable.