Why Michael Saylor sees bitcoin soaring to $13 million by 2045

• Michael Saylor predicts bitcoin will deliver a 29% annualized return over the next 21 years.
• Saylor attributes bitcoin's potential growth to increased adoption by investors and lower volatility.
• Republican control in Washington could lead to bitcoin-friendly policies that boost its value even higher, Saylor said.

Even as the cryptocurrency approaches a record high of $100,000, Michael Saylor still sees massive gains ahead to the tune of about 12,900%.

The cofounder and chairman of MicroStrategy told CNBC on Friday that bitcoin should deliver an annualized rate of return of 29% over the next 21 years.

"My long-term forecast is 21 years, 29% ARR. Right now we're 60% ARR, it will decelerate toward 20% ARR over the next 21 years, and the volatility will decelerate," Saylor said.

Simply put, Saylor believes that as bitcoin's adoption grows and its investor base expands, its volatility should decrease significantly. If that pans out, gone are the days of bitcoin experiencing painful drawdowns of more than 80%.

Saylor's prediction that bitcoin will see its volatility decrease suggests that the cryptocurrency's returns going forward should be more sustainable.

Another bullish factor for Saylor is Donald Trump's election win earlier this month and Republicans' sweep of Congress.

"I think that the red wave was incredibly bullish," Saylor said.

Republicans embraced crypto this past election cycle, and that could lead to legislation that supports the industry, and even the establishment of a strategic bitcoin reserve.

Senator Cynthia Lummis suggested to CNBC on Thursday that the Federal Reserve should sell some of its gold holdings to buy bitcoin.

Saylor is putting his money where his mouth is, having used his company as a vehicle to acquire a huge trove of bitcoin.

MicroStrategy holds 331,200 bitcoins worth more than $30 billion, and the company is raising debt via convertible bonds to continue its buying spree.

"Ultimately, I think the right way to think of it is, it's always going to be the stronger capital asset versus a conventional S&P index," Saylor told CNBC.

He added: "My forecast is $13 million a coin by the year 2045, and what I tell everybody is every bitcoin you don't buy today is going to cost you $13 million in the future."