1 Popular Cryptocurrency With 13,031% Upside, According to MicroStrategy's Michael Saylor

The total value of all cryptocurrencies in circulation currently stands at $3.5 trillion, which is near a record high. Bitcoin (CRYPTO: BTC) accounts for more than half of that value, thanks to its market capitalization of almost $2 trillion.

Bitcoin has become a popular store of value for investors due to its decentralized nature, capped supply, and secure system called the blockchain. But Michael Saylor, who cofounded software company MicroStrategy, thinks it has the potential to remake the global financial system.

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As a result, Saylor predicts Bitcoin could soar to $13 million per coin by the year 2045, which would translate to an eye-popping 13,031% gain for investors who buy it at the current price of about $99,000. But how realistic is that target?

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Bitcoin: The foundation of a new financial system?

Last year, the U.S. Securities and Exchange Commission (SEC) approved dozens of Bitcoin exchange-traded funds (ETFs), which provided individual and institutional investors with a safe, regulated way to own the cryptocurrency. It helped legitimize the view that Bitcoin is a real store of value, kind of like a digital version of gold.

Saylor believes Bitcoin is much more than that. He predicts a future where more than $500 trillion worth of real assets are "tokenized," meaning their ownership rights (among other things) are moved onto the blockchain, replacing current systems of record keeping. The $500 trillion figure basically represents the value of every asset in the world -- from every piece of real estate to every share in every company.

Since Bitcoin is truly decentralized and can't be controlled or manipulated by any person or company, Saylor thinks it's the perfect reserve asset for the tokenization process. It would be the currency people use when buying, selling, or transferring tokenized assets, which basically means everybody would have to own some Bitcoin to participate in this new financial system.

Saylor believes all of this could happen by the year 2045, and it would send Bitcoin from its current price of about $99,000 (as of this writing) to $13 million. The first step is to create a digital assets framework (a system of rules and laws), which he thinks might happen under the Trump administration. The incoming president is pro-crypto, and since his party now controls all three branches of government, this may offer an opportunity to get started on that enormous project.

Is $13 million per Bitcoin possible?

Mathematically speaking, a price-per-Bitcoin of $13 million would give the cryptocurrency a market capitalization of about $257 trillion (based on Bitcoin's current supply of 19.8 million coins). The total market capitalization of all 500 companies in the S&P 500 (SNPINDEX: ^GSPC) index now is $49.1 trillion, so Bitcoin would be worth five times more than that.

It doesn't sound realistic, and it's based on the assumption that every single government, company, and person in every country in the world will agree to operate under a new Bitcoin-based financial system. If you follow politics even a little bit, you probably know how difficult it is for people to agree on even the most basic points. I wouldn't bet on an overhaul of the entire global financial system -- at least not in the next 20 years.

Besides, fiat currencies with floating exchange rates are beneficial because not every economy operates at the same speed. Consider an economic shock like Brexit, for example. When the British people voted to leave the European Union in 2016, the value of their domestic currency (the British Pound) fell by about 20% against most other major currencies like the U.S. dollar. It helped to absorb some of the economic fallout by making British exports cheaper for global buyers.

Although Saylor's vision doesn't involve abandoning fiat currencies, any kind of Bitcoin standard would severely disadvantage the weaker economies of the world. They would have to fork out more money to buy a single Bitcoin than countries with a strong economy (and a strong domestic currency) like the U.S., and it's unclear how that problem will be solved.

Bitcoin might still be a good investment

Earlier, I said many investors consider Bitcoin a good store of value, especially now that ETFs are widely available. Since gold has been the standard when it comes to storing value for thousands of years, it might offer some insight into where Bitcoin could go from here.

The total value of all gold reserves stands at $18.1 trillion. Bitcoin's market cap would have to increase by 823% to match that, which translates to a price of $914,000. There is no guarantee it will get there in the near future (or ever), but it's a much more realistic target than Saylor's.

After all, don't forget that Saylor's company, MicroStrategy, owns 450,000 Bitcoins, so he has a vested interest in presenting highly bullish forecasts.

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Anthony Di Pizio 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.