Is Bitcoin Still a Millionaire Maker?

It's hard to believe now, but Bitcoin (CRYPTO: BTC) once traded for fractions of a penny. Of course, Bitcoin's price soared to over $100,000 at its peak. Early adopters saw small sums grow into life-changing fortunes, launching a conversation about cryptocurrencies as a mainstream investment asset.

But the ride hasn't been as fun in recent years. Bitcoin's price is up nearly 10,000% over the past decade, but only 105% over the past five years. That's a fine return by most standards, but nowhere near what people have come to expect from the famous crypto. Is Bitcoin still a millionaire maker? Here's why it might be time for investors to reset their expectations and why that's not a bad thing.

It's time to revisit what Bitcoin's ceiling might look like

Bitcoin's most obvious problem is simply how large it has become. Bitcoin is trading nowhere near its high and still has a market cap of $1.3 trillion. There's a point where large numbers become increasingly difficult to grow. In other words, it's typically easier for an asset to grow from $1 billion to $10 billion than it is to go from $1 trillion to $10 trillion. Otherwise, there would be far more trillion-dollar stocks out there.

Image source: Getty Images.

That's not to say that Bitcoin is done appreciating. It's just that now, at over $1 trillion, it's probably closer to its ceiling than it once was. For instance, if Bitcoin approached 10,000% gains in the next decade, it would be larger than the global economy's annual GDP. That's probably not realistic at this point.

Bitcoin is settling into its role as a digital store of value

Like gold, many investors view Bitcoin as a store of value and as an anti-inflationary asset. As long as that remains true, Bitcoin has fundamental tailwinds that could continue driving its price higher over time.

The U.S. government has created a Strategic Bitcoin Reserve to accumulate Bitcoin and other digital assets. At the same time, the proposed Clarity Act and other potential legislation can help define the regulatory landscape, making it easier for companies to use cryptocurrencies. These are steps toward widespread adoption that can support and stabilize Bitcoin prices, so investors don't see such volatile swings.

So, what can investors expect? Unfortunately for some, the days of people buying exotic sports cars from a $10 Bitcoin investment are probably long gone. However, there's still upside. The world's gold supply is currently estimated at $21 trillion. As Bitcoin adoption continues, it could reasonably continue appreciating as a digital alternative to society's oldest store of value.

Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.