1 Top Cryptocurrency to Buy Before It Hits $1 Million Per Token by 2031, According to VanEck

It's been a wild ride for Bitcoin (CRYPTO: BTC), the world's largest cryptocurrency, during the past year. After reaching more than $126,000 in October, the crypto and the rest of the digital-asset market, has entered bear territory, defined as a fall of at least 20% decline from its highs.

Now trading at about $79,000 (as of May 15), Bitcoin is down 37% since last October, and many other cryptocurrencies have fared worse. However, the crypto sector has actually survived many bear markets, some even harsher than the current one, and come back stronger than ever.

This time will be no different, according to VanEck's Global Head of Digital Assets, Matthew Sigel, who recently appeared on CNBC and said Bitcoin will hit $1 million per token by 2031.

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A heavily macro-driven move with cyclicality

Since last October, Bitcoin and the broader crypto sector have faced numerous headwinds. Bitcoin seemed to struggle like tech stocks for a time as investors shifted to a more risk-off mindset earlier this year and after the conflict in Iran began.

Bitcoin and blockchain technology also seemed to face concerns similar to those of software stocks, which struggled amid competitive threats from artificial intelligence (AI). Beyond that, crypto has faced concerns about quantum computing, which some believe could eventually penetrate crypto-level encryption.

This may have contributed to so-called whales unloading some of their large Bitcoin and crypto holdings, triggering further selling. But ultimately, Sigel and his team view the dip as a long-term buying opportunity.

On May 6, Sigel went on CNBC's Halftime Report to discuss his bullish thesis for Bitcoin. Sigel said that much of his team's thesis is driven by macro factors, noting that Bitcoin's correlation with the Nasdaq Composite has reached a five-year high, suggesting Sigel and his team are also very bullish on the tech-heavy Nasdaq.

At the time, Sigel said his team was encouraged because they hadn't yet seen froth in the derivatives market. He also said they are encouraged by demographic trends, specifically noting young investors' intent to allocate capital to Bitcoin.

It's going to be like the video game industry. Thirty years ago, it was just kids playing video games. Now, Elon Musk plays video games. People don't quit. They also don't quit Bitcoin. We now have the first central bank buying Bitcoin for its reserves, so this is a megatrend. But it's going to be very volatile along the way, and we are trying to smooth out some of that volatility.

Can Bitcoin actually hit $1 million by 2031?

The answer to this question is anyone's guess.

It's quite difficult to make five-year stock price predictions, let alone for cryptocurrencies like Bitcoin, which can't be valued using traditional methods that price multiples on earnings and free cash flow.

I would caution any investor from reading too much into a five-year price target.

The other issue Bitcoin has faced is the debate over the digital gold thesis. Some believe Bitcoin is a form of digital gold due to its 21 million finite token supply, which give it the potential to hedge against inflation and serve as a haven during times of extreme risk, such as on the geopolitical front.

Yet, as Sigel said, Bitcoin's correlation with the Nasdaq is now at a five-year high, so how can both be true?

Either way, I think investors can allocate a small amount of capital to Bitcoin and earn good long-term gains. The regulatory environment has improved drastically under President Donald Trump's administration, and institutional adoption seems to grow by the day.

Bitcoin also seems to have hit a level of broader adoption where it's unlikely to just suddenly go away. Whether it continues to have a high correlation to tech stocks or serves as a form of digital gold, either scenario should generate solid long-term gains.

Bram Berkowitz has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.