Q1 2036 — $11 Million Bitcoin
Bitcoin in an AI-Deflation World
I. Introduction: ~12% of Global Financial Assets
Last year, I outlined a path to $10 million bitcoin by 2035. That projection remains in play. This letter expands on my updated thoughts for 2036, 10 years from today.
The core driver of the next decade will be the interaction between two structural forces:
Artificial intelligence accelerating productivity, lowering production costs, and intensifying competition. As firms pass efficiency gains to consumers, margins compress and prices decline, creating deflationary pressure across goods and services.
Policymakers respond to that deflation with sustained monetary expansion.
When productivity accelerates and prices fall, policymakers expand liquidity. That liquidity requires a destination.
My base case for Q1 2036 is $11 million per bitcoin.
At that price, bitcoin’s network value would be approximately $230 trillion. Global financial assets today exceed $1,000 trillion. If global wealth compounds at 7% annually for the next decade, total global financial assets would grow to roughly $1,970 trillion by 2036. In that context, a $230 trillion bitcoin network would represent approximately 12% of global financial assets.
That outcome reflects a measured repricing of global wealth toward the only monetary asset with absolute scarcity.
Bitcoin does not need to replace all currencies. It does not need universal daily transactional use. It only needs to become the primary long-duration savings asset in a world defined by monetary expansion and technology deflation.
II. The AI Deflation Engine
Artificial intelligence represents the most powerful deflationary force introduced into the global economy since industrial electrification.
In 1915, the United States had roughly 26 million horses. They powered transportation, agriculture, and logistics. Within a few decades of the automobile scaling, that number fell below 3 million. A productivity shock replaced nearly 90% of the animal labor base.1
AI represents a similar shock to white collar human labor.
AI now drafts contracts, analyzes financials, writes code, and performs research once done by junior lawyers, analysts, and engineers.
AI coding tools shrink engineering teams and compress product timelines by automating debugging, testing, and documentation.
AI-driven robotics replace human roles in warehouses, manufacturing, and agriculture while reducing the need for on-site supervision.
Rapid model improvement and falling compute costs allow firms to substitute software for white-collar work across customer service, marketing, compliance, and operations.
This dynamic creates persistent creative destruction and margin compression across industries built around intelligent human labor scarcity. Entire cost structures change. Pricing power weakens across many sectors simultaneously.
In a neutral monetary system, sustained productivity growth would result in falling prices and rising real purchasing power. Under a debt-based fiat framework, persistent deflation destabilizes credit markets because wages and asset prices decline while mortgages, corporate loans, and sovereign debt remain fixed in nominal terms. For example, a laid-off white collar professional with a $150,000 salary who can no longer service a fixed mortgage forces losses onto banks that hold the loan, tightening credit and amplifying defaults across the system. Policymakers cannot tolerate sustained deflation.
The result is structural monetary expansion.
As AI drives real-economy deflation, central banks and fiscal authorities expand liquidity to prevent a deflationary spiral. The more effective AI becomes at reducing costs, the more aggressive the monetary response becomes to prevent debt deflation.
The long-term equilibrium becomes clear:
Persistent productivity deflation paired with persistent monetary expansion.
This pairing creates excess liquidity. That liquidity seeks a durable, perfectly scarce monetary asset capable of preserving value over the long run.
III. The Policy Reflex and the Expansion of Liquidity
Every deflationary shock follows a similar cycle.
Markets initially move toward safety. Cash and sovereign bonds receive strong bids. Credit spreads widen. Risk assets compress. U.S. treasury bond yields fall as investors look for USD denominated short-term safety.
This phase can feel scary, but it rarely persists for very long.
Deflationary signals trigger policy response:
Policy interest rates move lower
Central bank balance sheets expand
Targeted credit facilities support employment and financial stability
Fiscal programs offset income disruption
The political system may debate timing and scale. It does not tolerate sustained dollar deflation. Liquidity expansion becomes the inevitable response, as it was in 1987, 2001, 2008, 2020, and 2022.
As artificial intelligence accelerates productivity and compresses pricing power across industries, this reflex strengthens. Policymakers must continually expand liquidity to offset structural deflation.
The result is a persistent increase in broad money relative to the supply of scarce assets.
Traditional assets struggle to absorb that expansion:
Equities represent claims on firms increasingly exposed to AI-driven disruption, where creative destruction shortens corporate lifespans and weakens their reliability as long-term stores of value.
Real estate derives value from scarcity, yet AI and robotics accelerate design, permitting, and construction, expanding supply and limiting sustained price appreciation.
Sovereign bonds offer nominal stability, yet AI-induced deflation pressures policymakers toward further monetary expansion, eroding real returns.
Capital begins searching for a more reliable store of value that AI abundance cannot create more of.
IV. The Emergence of Digital Credit
A new financial product is forming around bitcoin. It is called Digital Credit.
Bitcoin increasingly demonstrates the characteristics of a long-term store of value in a world where AI-driven productivity compresses prices and forces policymakers into continual liquidity expansion. Yet bitcoin remains highly volatile and provides no income.
At the same time, interest rates remain structurally low, and there are few places to allocate capital into conservative, high-income assets.
Digital credit provides USD income to investors through publicly traded securities backed by large bitcoin balance sheets. Bitcoin treasury companies issue this credit to raise dollars, which they then deploy to acquire additional bitcoin. The structure creates two distinct financial products: amplified bitcoin ownership for common equity holders and stable USD income for credit investors.
Publicly traded instruments such as STRC and SATA represent examples of this. They are liquid credit securities designed to deliver double-digit income while being supported by balance sheets built on bitcoin that, at today’s bitcoin price, provide sufficient coverage to fund dividend payments for decades.
The mechanics are straightforward:
Yield demand attracts capital.
Capital funds credit issuance.
Issuance raises dollars.
Dollars acquire bitcoin.
As bitcoin appreciates over long horizons, the underlying collateral base strengthens. Stronger collateral supports further credit issuance. A reflexive loop forms between global yield demand and bitcoin accumulation.
This marks the early stage of a credit system built on a verifiably scarce money.
Global credit markets measure in the hundreds of trillions of dollars. Even modest allocation shifts toward bitcoin-backed credit instruments introduce structural demand far larger than previous bitcoin cycles. The marginal buyer of bitcoin increasingly becomes the global income-seeking allocator.
V. The Liquidity Destination Framework
As global liquidity expands, it concentrates in the asset with the strongest, most immutable monetary properties.
Absolute scarcity
Durability across time
Portability across borders
Divisibility and fungibility
Verifiability
Resistance to supply dilution
Deep, liquid markets capable of absorbing institutional-scale flows
As AI accelerates the production of goods, services, and financial claims, abundance increases across most asset categories. In that environment, scarcity becomes more valuable. Assets that cannot be diluted command a growing monetary premium.
Bitcoin embodies these monetary properties in their purest digital form. Its supply is capped. Its settlement is global. Its units are perfectly divisible and verifiable. Its issuance schedule is fixed.
Most traditional assets satisfy only fragments of this framework.
Equities offer growth exposure, yet they are claims on cash flows that face constant competitive pressure. In an AI-driven economy, every dominant firm becomes a target. A $1 trillion market capitalization represents a $1 trillion incentive for competitors to compress margins through automation, price reductions, or superior products. Creative destruction accelerates.
Real estate provides utility and income, yet rising prices incentivize new construction. Supply expands in response to demand, while regulation and taxation shape long-term returns.
Sovereign bonds represent claims on future fiat currency. Their value is tied directly to monetary policy, and persistent liquidity expansion pressures the purchasing power of those future cash flows.
Liquidity gravitates toward assets that preserve monetary integrity in an age of accelerating abundance. Bitcoin sits at the intersection of scarcity, neutrality, and global liquidity.
To illustrate, imagine a stadium with a lifetime maximum of 21 million tickets. Every four years, the number of new tickets issued is cut in half. By 2036, fewer than 41,000 new tickets will be created that entire year.
If global financial assets approach roughly $2 quadrillion by 2036 and continue compounding at approximately 7% annually, that implies roughly $140 trillion of new wealth created in that year alone. If all of that incremental capital sought monetary preservation in bitcoin, it would equate to more than $3.4 billion of demand per newly issued coin. Even if just 1% of that annual capital flow allocated toward bitcoin, that would represent $1.4 trillion competing for 41,000 new tickets, or roughly $34 million of demand per newly issued coin.
Realistically, at $11 million per bitcoin, the network would represent a substantial but reasonable share of a much larger global asset base by 2036. The outcome reflects gradual portfolio migration toward the most durable monetary asset available rather than replacement of the existing financial system.
VI. Q1 2036: A Snapshot of the Next Decade
Project forward ten years.
It is early 2036.
Interest rates across developed markets remain structurally low following repeated waves of AI-driven disruption. Automation periodically displaced entire categories of work. Unemployment fluctuated between roughly 3% and 15% as successive deflationary shocks rippled through labor markets. Each wave was met with rapid monetary easing, targeted fiscal transfers, and policy adjustments designed to stabilize income and prevent any deflationary spiral.
Productivity gains continued compressing costs across transportation, manufacturing, healthcare, logistics, and digital services. Many goods and services became increasingly abundant as intelligent automation scaled globally.
Equity markets delivered uneven real returns. Certain AI-native platforms compounded at extraordinary rates. Legacy business models faced recurring margin compression and restructuring. Broad indexes moved sideways as creative destruction intensified.
Traditional fixed income provided stability with small yield. Real estate stabilized across major developed markets, delivering mild real returns as supply expanded in response to prior price appreciation.
Bitcoin traded near $11 million, with many 50% drawdowns along the way.
Sovereign wealth funds acquired strategic allocations. Corporate treasuries treated bitcoin as a primary reserve asset alongside cash and Digital Credit. Publicly traded bitcoin-backed credit instruments such as STRC and SATA became standard components of global income portfolios. Pension funds and insurance allocators held them as income-generating securities.
Digital Credit markets built on bitcoin operated across public and private markets. Balance sheets designed to accumulate bitcoin while distributing predictable USD income attracted persistent demand in a yield-constrained world shaped by recurring policy intervention.
The global financial system did not break, but it evolved significantly.
Liquidity continued expanding.
Productivity continued accelerating.
Bitcoin absorbed the excess.
VII. The Time Arbitrage Opportunity
The great mispricing of bitcoin today will not last forever.
Most market participants focus on quarterly earnings, annual policy cycles, and near-term volatility. Few allocate capital based on structural monetary dynamics unfolding over a decade.
Artificial intelligence introduces disruption and periodic instability. There will be periods where cash and sovereign bonds outperform. There will be moments that feel disorderly. Timing those phases precisely remains difficult, if not impossible.
However, the long-term direction of policy response remains clear.
Deflationary pressure invites monetary expansion.
Monetary expansion seeks a durable store of value.
Bitcoin absorbs that expansion more directly than any other asset.
The path will not be smooth, but the conclusion will become increasingly obvious.
Bitcoin’s trajectory toward eight-figure price levels reflects structural monetary conditions rather than speculative enthusiasm and “belief.” As liquidity continues expanding within a technologically deflationary world, capital will concentrate into assets capable of preserving value across time.
Bitcoin stands alone in fulfilling that role at a global scale.
The opportunity today is to allocate before that equilibrium becomes consensus. The market continues pricing bitcoin as a volatile risk asset within a traditional cycle. The next decade will increasingly treat it as foundational monetary infrastructure.
The structural drivers behind my original $10 million bitcoin thesis have strengthened. The destination has become clearer. The window to front-run the monetary transition remains open.
See you in Q2.
— Joe Burnett
This letter is for informational purposes only and should not be considered financial, investment, or legal advice. Opinions expressed are my own and do not constitute recommendations. Always conduct your own research before making financial decisions.
Always bangers Joe thanks for this read
Many thanks for the amazing article Joe 👏
Really broadens ones horizons. Have some spare cash lying around. Been thinking of DCAing it over the next 12-15 months before BTC goes parabolic 2028 onwards.
The article's underlying thesis makes total sense. You have covered equities, real estate & fixed income but seems like gold wasn't covered.
How does gold perform in the above scenario viz-à-viz bitcoin and the other asset classes?