It may be a wild ride, but this cryptocurrency could generate some serious wealth. Here’s why.

Bitcoin (BTC 0.88%) it was undoubtedly one of the best financial assets. Over the past decade, the price has skyrocketed by 15,600%. For the sake of comparison, S&P 500 produced a total return of only 250% in the same time.

As of this writing, Bitcoin it’s trading 14% off its peak price, which might seem like an attractive entry point for some investors. It will certainly be a volatile ride, but this top cryptocurrency could generate serious wealth in the long run. Here’s why.

Standing on top of the troubled fiat system

First, it’s important to understand what makes Bitcoin special. To do this, investors should realize the problems with the current fiat system.

The US, for example, is the world’s dominant economy, but that hasn’t stopped it from running a constant fiscal deficit. The result is a growing debt burden. Right now, the country has $35 trillion in tax debt. That doesn’t include the worry of $69 trillion in unfunded Social Security and Medicare debt. These numbers continue to grow.

It just doesn’t help that the Federal Reserve began to reduce interest rates. This means that the US dollar will continue to be degraded as the money supply grows.

Understanding the unsustainable situation with the current fiat system, pseudonymous founder of Bitcoin Satoshi Nakamoto created cryptocurrency in late 2008 as a solution. One of Bitcoin’s most notable properties is that it has a falling inflation rate that cannot be changed unless a majority of nodes agree to it, which has never happened in its history. This is in stark contrast to the wild levels of money printing going on in the fiat system.

Another key feature is the fixed supply cap. There will only be 21 million Bitcoin tokens in circulation. This makes the digital asset absolutely finite, which is incredibly important. Owning Bitcoin offers investors an escape from the problems facing the global economy.

Greater interest from the investment community

The investment community has slowly begun to realize the compelling features of Bitcoin. And demand for the asset has continued to grow over the years. In January of this year, the Securities Commission approved funds traded on Bitcoin exchange (ETF) for the first time. The leading asset managers on Wall Street understood that their clients wanted exposure to the digital asset. These ETFs have seen tremendous capital inflows so far.

Another milestone in the so-called arrival of Bitcoin is how important it has become in the current election cycle. Former President and current presidential candidate Donald Trump was the keynote speaker at the recent Bitcoin Conference in Nashville. He went so far as to say that the US would build a strategic Bitcoin reserve under his leadership. This is a clear indicator of the growing importance of Bitcoin.

As people learn more about Bitcoin, they will likely gravitate towards it. Instead of being viewed as a crypto risk, Bitcoin can be viewed as a safe haven asset. Just look at the 1,170% gain since the start of the COVID-19 pandemic. In addition, the fact that it has a low long-term correlation with other financial assets is a benefit for portfolio diversification.

Play the long game

Bitcoin has been around for about 15 years. The digital asset has bounced back stronger after each major decline to hit new highs. It has proven to be anti-fragile and durable. And the longer Bitcoin continues to survive and thrive, the more likely it is to go nowhere.

But to be clear, it will continue to be a volatile financial asset to own, even if its current $1.3 trillion market cap rivals some of the most valuable companies on Earth. Consequently, anyone who wants to own Bitcoin must have a long-term mindset in order to benefit from the possibility of generating serious wealth from it.