Bitcoin (CRYPTO: BTC) has undoubtedly been one of the best financial assets. In the past decade, the price has skyrocketed an unbelievable 15,600%. For comparison's sake, the S&P 500 has produced a total return of just 250% during the same time.

As of this writing, Bitcoin trades 14% off its peak price, which might look like an attractive entry point for some investors. It will certainly be a volatile ride, but this top cryptocurrency could generate serious wealth over the long term. Here's why.

Standing above the troubled fiat system

It's first important to understand what makes Bitcoin special. To do this, investors should realize the problems with the current fiat system.

The U.S., for example, is the world's dominant economy, but that hasn't prevented it from consistently running a fiscal deficit. The result is a burgeoning debt burden. Right now, the country has $35 trillion in fiscal debt. This doesn't include the troubling $69 trillion in unfunded Social Security and Medicare liabilities. These figures keep rising.

It doesn't help that the Federal Reserve just started cutting interest rates. This means that the U.S. dollar will continue to be debased as the money supply climbs.

Understanding the unsustainable situation with the current fiat system, pseudonymous Bitcoin founder Satoshi Nakamoto created the cryptocurrency in late 2008 as a solution. One of Bitcoin's most notable properties is that it has a declining rate of inflation that cannot be altered, unless the majority of nodes agree to it, something that hasn't happened ever in its history. This is in stark contrast to the wild levels of money printing that happen in the fiat system.

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

Greater interest from the investment community

The investment community has slowly started to realize the compelling characteristics of Bitcoin. And demand for the asset has kept growing over the years. In January of this year, the Securities and Exchange Commission approved spot Bitcoin exchange-traded funds (ETFs) for the first time ever. Major Wall Street asset managers understood that their customers wanted exposure to the digital asset. These ETFs have so far seen tremendous capital inflows.

Another milestone in Bitcoin's so-called arrival 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 U.S. will build a strategic Bitcoin reserve under his leadership. This is a clear indicator of Bitcoin's growing importance.

As people learn more about Bitcoin, they will likely gravitate to it. Instead of being seen as a risky crypto, Bitcoin can be viewed as a safe haven asset. Just look at its 1,170% gain since the start of the COVID-19 pandemic. Plus, the fact that it has low long-term correlation to 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 come back stronger after every major drawdown to reach newer highs. It has proven to be anti-fragile and resilient. And the longer Bitcoin continues to survive and thrive, the greater the probability that it isn't going anywhere.

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

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Neil Patel and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.

It May Be a Wild Ride, but This Cryptocurrency Could Generate Serious Wealth. Here's Why. was originally published by The Motley Fool