Why a billionaire investor thinks bitcoin's total market value could more than double to $5 trillion
Philippe Laffont, the founder of hedge fund Coatue Management, said he added bitcoin to his firm's Fantastic 40 list, a collection of investments it sees as major winners through 2030.
That's partly because Laffont believes the total market cap of the world's biggest crypto could rise to as much as $5 trillion one day. That implies bitcoin's total value rising 134% from a market cap of around $2.1 trillion on Wednesday.
"I have not gotten involved in bitcoin. I wake up every day at 3 in the morning and I'm like, 'why am I such an idiot? What have I been waiting for, not being involved in it?' And it just goes up and up," Laffont told CNBC on Wednesday.
Bitcoin's price has been volatile this year amid tariff-related volatility and a mix of geopolitical and economic concerns. The crypto has rallied to $107,000 in recent days, bringing its price up 14% year-to-date. It hit an all-time high above $111,000 in May.
Laffont, who said he initially brushed off bitcoin as an attractive investment, added that there were a few reasons why he's warming up to the cryptocurrency and sees the value soaring.
For one, bitcoin's current valuation relative to the rest of the world seems too low, according to Laffont.
The net worth of all world assets hovers around $500 trillion, Laffont said. That means bitcoin represents around 0.5% of the world's total assets, but Laffont thinks it's reasonable for bitcoin to represent 1%-2% of the total.
Global stocks, by comparison, make up around $120 trillion of the world's assets, while gold makes up around $20 trillion, he added.
Second, bitcoin's volatility appears to be declining relative to stocks. Bitcoin dropped 11% in the days after President Donald Trump announced his sweeping array of tariffs. That's a slightly less severe decline when compared to the Nasdaq 100, which dropped 12% from April 2 to its low on April 8.
"I always thought, bitcoin's amazing, but it's double or triple the volatility of the Nasdaq," Laffont said. "It seems its volatility as an asset class is coming down."
Third, bitcoin could benefit from concerns around de-dollarization and the end of US exceptionalism.
Global investors have shown some signs that they're less willing to park their wealth in US assets after this year's tariff-fueled sell-off.
More than half of global investors surveyed by Bank of America in June said they believed international equities would be the best-performing asset over the next five years, compared to just 23% of investors who said they believed US equities would be the top performer.
The US Dollar Index, which measures the dollar against a basket of foreign currencies, has also declined 10% year-to-date.
Laffont said he was now considering purchasing bitcoin.
"Do I own it now? Do I own it tomorrow or in a few days? But every day, I do think, 'Why do I not own it?'" Laffont said. "Sometimes you have to change your mind and you have to say, well, I made a mistake," he added.
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