Bitcoin (BTC -1.46%) has emerged as one of the most compelling investment opportunities of the past decade. Investing in the coin has already made many people into millionaires, and for some of the early adopters, even billionaires.

There is still plenty of upside with this opportunity. It could even make you into a millionaire, under the right conditions and with plenty of patience. Here’s why Bitcoin’s unique combination of scarcity and growing demand makes it an attractive long-term investment.

1. Scarcity marches on, and it won’t ever stop

There will never be more than 21 million Bitcoin, and roughly 19.9 million (95% of the total) are already in circulation, which is to say that they’re in someone’s wallet instead of waiting to be mined and distributed. About 20% of those coins in wallets (an estimated 3.7 million) are gone forever, either because they’ve been burned or because they’re in lost wallets, slicing the coin’s floating supply even more.

The quantity of fresh supply being produced is not going to increase, ever. In fact, the amount mined per new block will halve in 2028, and then again every four years thereafter. It does not take much in the way of new demand to drive the coin’s price higher given the declining rate of supply growth.

Image source: Getty Images.

Scarcity alone doesn’t guarantee riches for new buyers of the coin in any way, but it sets the stage for very favorable supply mechanics from the perspective of holders. The real squeeze shows up when buyers with deep pockets try to corner more of the remaining float, creating a classic supply and demand dynamic that you’ll find in every microeconomics textbook.

As supply tightens, prices may surge higher while increasing competition among buyers can further accelerate price moves. This is the combination that millionaire-maker assets are (sometimes) made of.

2. Bitcoin reserves are forming in public and private hands

When holders control a large portion of an asset’s supply, they have a lot of influence over the price. If they refuse to sell, it’s bullish. And that’s what’s happening now.

U.S. spot Bitcoin exchange-traded funds (ETFs) exploded onto the scene in 2024, and now count investment advisors as their biggest customer cohort, collectively holding 124,753 bitcoins worth north of $10 billion. Every coin soaked up by an ETF share is one less coin floating around on exchanges. Institutional investors tend to think about holding assets for much longer than the average retail investor.

Corporations are piling in, too. For example, the Bitcoin treasury company Strategy holds more than 582,000 coins as of June 9, a sum that is worth about $63 billion, and is equivalent to nearly 3% of all of the coins that will ever exist.

When boardrooms lock coins away for treasury purposes, they’re signaling a multiyear mindset rather than a quick flip. It also helps that big purchases from high-profile treasuries, like Strategy, tend to generate some buzz in the media, thereby attracting even more capital inflows over time.

Even governments are joining the club. El Salvador’s reserve has grown past 6,100 bitcoins despite International Monetary Fund pressure to divest. Likewise, the U.S. government may eventually implement a Strategic Bitcoin Reserve, which would be stocked with seized assets and intended for long-term holding.

Institutional holders including governments don’t panic sell on rumors or even dips. Their longer horizons and regulatory constraints tend to damp volatility, which is good news for patient investors aiming to ride coattails rather than chase momentum. The more countries and institutions resolve to hold Bitcoin, the better its chances of creating millionaires during the coming decades.

3. Mining factors and holder stats look bullish too

Behind the headlines, Bitcoin’s mining machinery has never looked stronger.

The total computing power (hash rate) and the mining difficulty both notched fresh records at the end of May, a sign that miners are confident enough in future rewards to pour capital into ever-faster rigs. They need to do that to capture the reward for mining new blocks, so the fact that the computing power of the network is continuing to increase means that miners broadly see the coin’s price rising enough to return a profit.

Meanwhile, long-term holders, which are defined as wallet addresses that have been dormant for five months or more, control a record 14.5 million bitcoins, or roughly 75% of the supply. At the same time, as of early May about 88% of all Bitcoin in all wallets sits at an unrealized profit. When most investors are comfortably ahead, they’re less prone to capitulate during pullbacks, creating a virtuous circle of low selling pressure and resilient prices.

Of course, sentiment can sour fast.

Buy thoughtfully, size positions so volatility won’t force your hand, commit to holding for at least five years, and give the network time to work in your favor.