I’m about to make the most accurate Bitcoin (BTC -2.10%) prediction you’ll ever read: In 2035, Bitcoin will either be worth practically nothing or it’ll be worth half a million dollars. Maybe more.

There really isn’t a middle ground here. Bitcoin is either a moonshot or a total bust in the long run. Let me explain why.

Bitcoin maximalists see a golden future ahead

Bitcoin maximalists believe that the “digital gold” is the only currency worth owning in a long-term perspective. It’s better than every competing cryptocurrency and all of the traditional fiat currencies around the world, and you can throw physical assets like gold into the same category.

The idea is that Bitcoin will become the world’s preferred medium of monetary exchange over time. Forget the dollar and the Euro. Gold bars are already an uncommon form of payment, and in this scenario, alternative payment-focused cryptocurrencies like Litecoin (LTC -1.94%) and XRP (XRP -3.00%) never catch on.

Bitcoin’s guaranteed scarcity is the core argument for firmly dedicated bulls. Only 21 million coins will ever be minted, though you can split each one up in 100 million Satoshis (SATS 13.93%). So there’s a hard limit to the amount of available Bitcoin assets, while the global demand for this stuff could grow to the moon.

And it doesn’t take a complete Bitcoin victory to bring this coin to a $500,000 price point. Of the 21 million coins that will ever exist, more than 99% will have been mined by 2035. So the total value of every Bitcoin at that price would be approximately $10.5 trillion.

That’s about half the value of gold today. Estimates vary, but the total value of above-ground gold is at least $19 trillion.

The timeline for Bitcoin replacing other assets is up for debate, of course. A wholesale revolution where every country and all their citizens forget about old-school currencies just 10 years from now may be overly optimistic. Still, even a partial replacement of just the gold market would lift Bitcoin to $500,000 or more.

Five ways Bitcoin could crash to zero

That sounds great, but I’m still not converting my life savings into Bitcoin today. There’s no such thing as a risk-free investment, and Bitcoin is no exception.

There are actually many things that could go wrong for the largest cryptocurrency over the next decade. Here’s a brief and incomplete list of the most concerning threats:

• Quantum computers could mature faster than expected, cracking Bitcoin’s encryption before it adopts a quantum-safe algorithm. At its core, Bitcoin’s transaction security depends on one encrypted ledger, and you only have to break its encryption once to mess up the whole system.

• A better alternative could emerge, stealing Bitcoin’s thunder. This could be a more sophisticated cryptocurrency or a completely new value-storage solution. The likes of Litecoin and XRP are certainly trying their best. It won’t be easy to push the trillion-dollar king off this throne, but nothing is impossible.

• In particular, central bank digital currencies (CBDCs) may evolve in the coming years. Instead of a monolithic Bitcoin treasury, the global economy could end up with several competing digital currencies, each backed by massive banks or entire nations. I don’t know if that’s a better situation or just a more dramatic one. Either way, it’s a realistic possibility.

• Did you know that Bitcoin’s operating code is updated on a regular basis? The platform is up to version 29.1 these days. Developers submitted 588 changes to the code in the last three months. What if the next official update contains a mistake or some malicious code that makes it through reviews and breaks the system?

• Many governments have attempted to limit ownership and usage of Bitcoin and other cryptocurrencies. A future wave of anti-crypto regulations could have staying power.

I could go on, but those are the big ones in my mind. None of these issues seems particularly likely, which is why I own some Bitcoin and iShares Bitcoin ETF (IBIT -3.63%). If you expect one (or more) of these potential issues to actually show up in the next few years, you shouldn’t invest in Bitcoin-based assets at all.

The all-or-nothing nature of network effects

The middle ground is actually the least likely outcome for Bitcoin because of how network effects and trust work in monetary systems.

Think about it: Bitcoin either succeeds in becoming a trusted store of value and medium of exchange — or it doesn’t. A successful network effect would create a powerful flywheel of bullish effects. More users make the Bitcoin network more valuable, the increased liquidity adds to the system’s stability, institutional investors invest more in the trustworthy platform that emerges, and then you’re back to inspiring more everyday Bitcoin users.

It’s a virtuous cycle that can push Bitcoin (or any other asset) to sky-high prices.

But the whole network effect falls apart if the trust is broken by hackers, rivals, or government suppression. Bitcoin wouldn’t be worth $200,000 or $10,000 the day after a successful encryption hack — it would be worthless. Users flee, liquidity evaporates, transaction processing stops. That’s the path to $0 per coin.

Will the Bitcoin balloon soar or pop in the next decade? Image source: Getty Images.

A cautious approach to a black-and-white Bitcoin situation

Bitcoin in 2035 won’t be a quirky experiment anymore. It will either become a legitimate financial infrastructure by then, or be relegated to the dustbin of technological history alongside overhead projectors, calculator watches, and dial-up modems.

I stand on the bullish side of this argument, but the risks are real. Bitcoin maximalists like Strategy (MSTR -7.14%) chairman Michael Saylor are betting the whole, entire farm on Bitcoin, and raising more money just to buy more crypto. That’s too much for me. Bitcoin is a reasonable inclusion in a diversified portfolio, not a comfortable life-savings bet. The worst-case scenario can’t be allowed to destroy my savings.

The real question isn’t whether Bitcoin will be worth $100,000 or $200,000. It’s whether Bitcoin succeeds in its mission or fails entirely. As Fools, we invest for the long term — and in the long term, Bitcoin’s price prediction is simple: moon or tomb. Feel free to hope for the best, but also prepare for the worst.