Could Bitcoin Reach $11 Million By 2036? Insights from an AI-Deflation Analysis

Bitcoin To $11 Million By 2036? This AI-Deflation Thesis Is Turning Heads

Summary: Joe Burnett, the VP of Bitcoin Strategy at Strive (Nasdaq: ASST), suggests that Bitcoin may soar to $11 million by Q1 2036. His analysis does not revolve around Bitcoin replacing current financial systems but instead focuses on its potential to become the main long-term savings asset in an era of AI-driven deflation and ongoing monetary expansion.

Key Takeaways:

Bitcoin’s Potential Value: Burnett estimates Bitcoin's network value might reach around $230 trillion by 2036.
AI's Impact on Economy: AI is predicted to compress costs and boost output, creating sustained downward price pressure.
Monetary Policy Responses: Central banks may increase liquidity to prevent deflation, which could benefit Bitcoin.
Unique Asset Features: Bitcoin’s capped supply and portability may position it favorably as an asset for preserving value.
Future Market Dynamics: The increasing use of Bitcoin could reshape how investors view this cryptocurrency, transitioning it towards a recognized financial infrastructure.

Understanding the Bitcoin 2036 AI-Deflation Thesis

At the core of Burnett's analysis is the concept he refers to as the “AI deflation engine.” He believes that artificial intelligence will significantly reduce labor costs, speed up production, and heighten competition across various sectors, resulting in persistent downward pressure on prices. This situation mirrors the historical shift from horses to automobiles, but, according to Burnett, this time, the focus is on white-collar jobs. AI is already generating contracts, analyzing financials, writing codes, and taking on research tasks that were previously performed by entry-level professionals, with robots increasingly infiltrating logistics, manufacturing, and agriculture.

In a stable monetary system, Burnett argues that such a surge in productivity would typically lead to increased purchasing power. However, in a debt-driven fiat economy, it can lead to instability. Falling wages, declining asset prices, and fixed nominal liabilities create a challenging environment. “As AI drives deflation in the real economy, central banks and fiscal authorities will likely expand liquidity to avoid a deflationary spiral,” he remarked. “The more efficiently AI reduces costs, the more aggressive the monetary response will be to mitigate debt deflation.”

This reaction from monetary authorities creates a connection to Bitcoin. Burnett points out that initial deflationary pressures often result in moves toward cash and government bonds. However, such periods typically evolve into rate cuts, balance-sheet expansions, credit support, and fiscal stimulus. He cites historical instances from 1987, 2001, 2008, 2020, and 2022 as proof that policymakers usually act to combat prolonged deflation. According to his analysis, the eventual outcome is ongoing productivity-driven deflation alongside persistent monetary expansion, which leads investors to seek assets with a supply that cannot be easily manipulated.

Burnett expands his views beyond Bitcoin. He suggests that equities face increasing threats from AI-induced market disruptions. While real estate retains inherent value due to scarcity, advancements in technology could speed up design and construction processes, limiting long-term appreciation. Sovereign bonds may offer nominal stability but remain vulnerable to currency dilution. In contrast, he argues, Bitcoin stands apart, as its fixed supply, divisibility, portability, and trustworthiness make it well-equipped to absorb global liquidity over time.

Furthermore, Burnett introduces a concept he terms “Digital Credit” — income-generating securities supported by significant Bitcoin holdings. He cites public instruments like STRC and SATA as examples that provide income to credit investors while supporting further Bitcoin accumulation. This relationship could spark a feedback loop between global yield demand and Bitcoin purchasing.

Burnett heavily emphasizes scarcity metrics. By 2036, he predicts that fewer than 41,000 new BTC will be issued annually. If global financial assets increase to approximately $2 quadrillion and just 1% of yearly capital seeks to preserve value in Bitcoin, this would lead to about $1.4 trillion chasing that limited new supply. This translates to approximately $34 million in demand for each newly minted Bitcoin.

“The journey may be uneven, but the destination will become clearer,” Burnett concludes. “Bitcoin's ascent to eight-figure price levels is driven by fundamental monetary conditions rather than speculative excitement and ‘belief.’ As liquidity expands in a deflationary technological realm, capital will concentrate on assets capable of retaining value over time.”

His final point focuses on timing rather than straight-line growth. He believes that Bitcoin continues to be priced as a volatile, cyclical asset; however, the coming decade is likely to possess characteristics aligning it more closely with monetary infrastructure. Whether this transition aligns with his $11 million forecast remains to be seen; nonetheless, Burnett’s assertions are clear: if AI continues to drive abundance while policymakers respond with liquidity, Bitcoin might attract an ever-growing portion of global capital.

At press time, Bitcoin traded at $66,958.

Bitcoin price chart Bitcoin must overcome the 200-week EMA, 1-week chart | Source: BTCUSDT on TradingView.com