James E. Thorne, Wellington-Altus’ chief market strategist, argued that the main problem facing Bitcoin is not volatility, but its “absolute scarcity” characteristic, which investors have yet to fully internalize.
Thorne noted that in traditional financial circles, the view is frequently expressed that Bitcoin is too volatile to be included in the same portfolio as gold and large-cap company stocks. However, the strategist emphasized that 30-40% declines in AI chipmakers and high-beta technology stocks are tolerated, and even assets with market capitalizations above $5 trillion can be considered core investment vehicles.
Therefore, Thorne said volatility alone is not enough to exclude an asset from a portfolio and the real difference comes from asset class, regulatory structure and political acceptance. He mentioned that semiconductor companies are cash-generating stocks and can be easily included in technology-focused portfolios, while Bitcoin is a monetary asset that does not generate yield, is not tied to any state, and has a limited supply of 21 million units. According to Thorne, the “too volatile” label used for Bitcoin serves as a justification that masks the lack of sufficient regulatory and institutional authority for large investment firms.
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He said that if the Clarity Act, currently under consideration in the United States, explicitly recognized and regulated digital assets, investment committees could view Bitcoin as a legitimate part of the portfolio rather than a compliance issue.
Thorne said Bitcoin’s valuation potential would be clearer if regulatory hurdles were removed, arguing that Bitcoin does not need to reach the market capitalization of gold. He suggested that even if Bitcoin only approached Nvidia’s current market capitalization, its unit price could reach around $240,000 to $250,000.
Thorne predicted that if Bitcoin reached the same market capitalization as gold, its price could reach between $1.5 million and $1.8 million. He said these scenarios rely on a limited supply of Bitcoin, a decrease in effective circulating supply, and the normalization of institutional access.
Noting that markets have accepted the sharp swings of AI companies reaching multibillion-dollar valuations, Thorne argued that the view that volatility should keep Bitcoin’s value well below these levels stems from monetary and political preferences rather than true risk analysis.
*This does not constitute investment advice.