The US Government Expects Bitcoin To Hit Between $250,000 and $6 Million in Around a Decade, as per the Assumptions Embedded in the Budget Document

12.03.2024 - 07:43 / wccftech.com / Rohail Saleem

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.

Typically, it is the astronomical fiscal deficit enshrined within the annual budget document of the US that garners attention. This time around, however, President Biden's 2025 budget is attracting quite a lot of eyeballs from the crypto sphere, courtesy of a line item embedded toward the end of the voluminous financial document that illustrates the US government's projections vis-a-vis Bitcoin.

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Riot Platform's VP of Research, Pierre Rochard, recently distilled the US government's revenue projections from the regulation and taxation of digital assets into the theoretical price of Bitcoin that underpins those estimates. As per his findings, the US Office of Management and Budget expects Bitcoin to hit $250,000 by 2034 - 2035. If you wish to examine that line item yourself, head over to page 163 of this document.

Basically, Rochard divides the revenue that the US government expects to generate from digital assets in 2025 ($1.035 billion) by Bitcoin's current price of around $72,000. He then multiplies the result by the revenue of $3.65 billion that the government expects to generate in 2035, leading to an end result of $254,158 as the expected price of one Bitcoin. Critically, this analysis ignores any improvements in the government's regulatory or taxation capacity in relation to digital assets in driving up the revenue projections.

By applying the same approach to the budget's projections for digital asset mining excise tax, Rochard arrives at an estimated assumed price of around $6 million for one Bitcoin by 2033.

We noted earlier today that Bitcoin has now formed a new all-time high on the back of a confluence of benevolent tailwinds, which include soaring inflows into the spot Bitcoin ETFs, MicroStrategy's ongoing Bitcoin purchases, and the upcoming halving event and the deflationary forces that it is expected to unleash.

Even if we assume that Rochard's rudimentary calculations paint a correct picture, the underlying assumptions in relation to the $250,000 price of Bitcoin are likely to be very conservative. After all, based on Bitcoin's current momentum, it can certainly hit the $100,000 price level within the next few months. In fact, Fundstrat's Tom Lee expects Bitcoin to close the year at a price of around $150,000.

What's more, some analysts, such as André Dragosch, ETC Group's head of research, are now openly calling for Bitcoin to usurp the primacy of Gold as the premier safe-haven asset. Based on the two assets ' stock-to-flow ratios, Dragosch posits that