The Long-Term Bull Case For Bitcoin

Those of us that live in the Bitcoin world are acclimated to the rollercoaster that is Bitcoin's price. As the first cryptocurrency to enter the mainstream economy, it paved the way for thousands of altcoins and crypto projects to follow.

Yet, despite its age and position at center stage in the ongoing financial revolution since 2010, Bitcoin is no stranger to volatility and diabolical price swings.

Bitcoin's price has undergone dozens of corrections and rallies to cement itself as the largest cryptocurrency by market cap. As of now, it has lost more than 50% of its previous all-time high, yet investors and Bitcoin maximalists are still betting big on the future of Bitcoin.

We understand that short-term volatility is the ramification of the underlying technological and social revolution of Bitcoin that has enabled an entire decentralized, fair financial system available to all humans.

Will BTC Be Able to Sustain Its Dominance?

Unfortunately, there is no absolute answer. But we can still assess Bitcoin's future, at least to an extent, based on its historical timeline, current status and ongoing developments. Here are some factors that strengthen Bitcoin's long-term bull run.

Rapidly Rising Adoption

BTC shattered its previous records in 2021, partly driven by the influence of the pandemic and the economic turmoil that pushed investors to consider Bitcoin as a hedge. The global economy was moving from one crisis to the next, and many people chose to use Bitcoin as a hedge.

The pace of adoption across institutional and retail users achieved by BTC between 2020 and 2021 was unlike anything the market had ever experienced. At its peak, Bitcoin's total market capitalization reached $1 trillion — exceeding the GDP of sizable countries like Turkey, Indonesia and the Netherlands.

Several countries, such as El Salvador and the Central African Republic (CAR), adopted Bitcoin as a legal tender. Prominent lawmakers, politicians and industry leaders are even championing the many benefits of Bitcoin (and other cryptocurrencies) in their respective jurisdictions.

Bitcoin has also witnessed a strong trajectory in terms of its use as a payment medium as we have seen several leading businesses start accepting Bitcoin. An HSB survey from 2020 revealed that almost 36% of small and medium enterprises in the U.S. were accepting BTC. Then, in 2021, Tesla CEO Elon Musk publicly announced that Tesla would accept Bitcoin as payment. Several mainstream companies like Wikipedia, Twitter, Microsoft, AT&T, Burger King, KFC, Overstock, Subway, Twitch, Pizza Hut and hundreds of others followed suit, jumping on the Bitcoin bandwagon.

BTC adoption isn't just limited to developing countries or consumer-centric brands. Institutional investors and TradFi companies, too, are diving in. A dive into MicroStrategy's most recent report highlights that the company commands more than 125,000 BTC on its balance sheet. Other companies like Tesla, Galaxy Digital Holdings, Block (formerly Square), Marathon Digital Holdings, Hut 8 Mining Corp, Coinbase Global, Riot Blockchain and Bitcoin Group SE collectively hold BTC worth billions of dollars.

Considering the rate at which institutions and enterprises embrace Bitcoin and the ongoing development of BTC-focused solutions like payment processing, scaling solutions and DeFi protocols, the catalysts for heightened BTC demand already exist and might rise further. As institutional adoption increases, the value of BTC will gain new momentum.

The Next Halving Event

Like any other asset that holds economic value, the price of BTC also depends on its supply and demand. The closer BTC gets to its 21-million token limit, the higher its price could go, assuming that demand for BTC remains the same or increases.

Past data indicates that, on average, the price of BTC has nearly quadrupled after every halving. To be precise, after the past three halvings, BTC's price jumped by 9,915% (2012), 2,949% (2016) and 665% (2020).

The Bitcoin network will undergo two halvings before 2030 (one in 2024 and the next in 2028). Both halving events will further reduce the rate at which new coins are minted and constrain the supply even if demand for BTC continues to increase. From an economic perspective, this means that the value of BTC could go substantially higher as Bitcoins in circulation become scarcer over time.

Payments Solutions and Advanced Smart Contracts on Bitcoin

The Bitcoin network's gradual expansion into the Defi and NFT ecosystems is another key driver that will play a pivotal role in shaping BTC's future. Thanks to the emergence of payment channel solutions, smart contract capabilities and sidechains layered on top of Bitcoin, the network has laid the groundwork to become a hub for Defi and NFT projects.

The Lightning Network, the payment processing solution for the Bitcoin network, is also playing a key role in BTC's increased adoption. As a scalability solution, the network is resolving the challenges of slow transaction speeds and inflated transaction costs without compromising security. With more than 80 million registered users, the Lightning Network simplifies Bitcoin adoption for transactional purposes, making the network more accessible. While it has proven to have an immense value in enabling Bitcoin adoption, serving a billion users will require Bitcoin Layer 2 alternatives like RSK to reach substantial scaling.

RSK not only scales Bitcoin but also brings stateful Turing-complete smart contracts to the Bitcoin ecosystem while maintaining a degree of decentralization and leveraging Bitcoin's proof-of-work security. It has unlocked a diverse range of use cases for the Bitcoin blockchain, enabling developers to build and deploy dApps and protocols on its chain while harnessing the security and liquidity of the Bitcoin network. Today, RSK is home to a thriving Defi ecosystem, including Money on Chain, which issues a dollar-pegged stablecoin collateralized in BTC, Sovryn, which offers borrowing, lending and derivatives, and Tropykus, another borrowing and lending alternative focusing on the Latin American market.

What Can We Expect From Bitcoin in 2030?

Considering Bitcoin's current market dominance and the perception of its staying power among the crypto community, the price of BTC could increase substantially by 2030. This expansion wouldn't be limited to its value or market capitalization. Still, it would also consider the value appreciation of the Bitcoin network's growing ecosystem across emerging segments (Defi, NFT and P2E games).

Ethereum's ongoing challenges in scalability and cost-efficiency have already paved the way for several third-generation blockchains to chip away at its Defi and NFT hegemony. Meanwhile, the Bitcoin network, powered by its scaling solutions, smart contracts platforms and sidechains, is continuously equipping itself with the necessary infrastructure to facilitate these flourishing ecosystems.

Fintech companies and developers are increasingly looking to build on the Bitcoin network. While there are still significant challenges to simplifying the user experience and reducing the inherent risks of these technologies, this new wave of Bitcoin-centric solutions may well unlock the floodgates that can help propel the value of BTC over the remainder of the decade. And most importantly, take current advanced DeFi solutions to everyday users.

Bitcoin hasn't been immune from the latest market turmoil, more frequently correlating with major stock indices, but that doesn't necessarily negate its promising outlook. As a deflationary network, time is Bitcoin's best friend. In the meantime, it is a perfect moment to learn about the underlying revolutionary technologies being built on top of Bitcoin, which continue growing relentlessly and will set the basis for the financial system of the future.

(Adrian Eidelman is the co-founder of RSK, a DeFi for Bitcoin platform)