Considering the current price point of Bitcoin, which is below $90,000, is it advisable to invest?
16 years since its inception and boasting a market cap surpassing $1.7 trillion, Bitcoin (BTC, -2.40%) remains the world's oldest and most valuable cryptocurrency. Despite a three-month slide, Bitcoin's resilience, as demonstrated by its ability to recover from lows and reach new highs, leaves few doubting its longevity. So, should investors jump on the Bitcoin bandwagon while it's trading below $90,000? Here's why I think they should:
Embracing Change
You'd be hard-pressed to envision a time five years ago when Bitcoin would be a talking point in political arenas or a favored asset for Wall Street giants. However, the current landscape is proving otherwise.
Bitcoin has gained significant traction as a topic of interest for politicians. The Trump administration, for instance, has raised the crypto's potential as a strategic reserve or a means to foster digital asset innovation.
Moreover, financial powerhouses are diving headfirst into Bitcoin. Successful spot Bitcoin ETFs have attracted considerably high returns from asset managers, with these ETFs shaping up to be significant moneymakers.
Few could have foreseen such rapid progress for Bitcoin in the political sphere and on Wall Street. This growth in support lends credence to the notion that Bitcoin's certainly not going anywhere and may even play a more substantial role in discussions a decade from now.
The Power of Scarcity
Bitcoin's primary strength lies in its fixed supply, which is capped at 21 million due to a hard code constraint. This scarcity tends to drive Bitcoin's value up, particularly in comparison to traditional fiat currencies that can be debased through inflation.
The world's M2 money supply (when aggregating the total amount of money in circulation from major central banks) has more than doubled in the past 15 years, now standing at almost $90 trillion. This immense expansion has been driven by ballooning fiscal deficits, indicating an escalating trend in debt accumulation.
Bitcoin benefits from the expanding liquidity, with interest continue to grow as capital travels throughout the financial system. This steady increase in demand translates into a promising outlook for Bitcoin's future value.
Gold's Shadow
Bitcoin is frequently compared to gold, primarily due to its finite supply and potential to serve as a store of value. If we compare Bitcoin to gold's market worth of approximately $19.7 trillion, Bitcoin has considerable room for growth. Given its current value, Bitcoin has the potential to increase ten-fold, emerging as a formidable investment opportunity.
Granted, reaching such levels requires patience and a long-term investment strategy. However, the potential return makes it worthy of consideration for investors seeking substantial yields.
Bitcoin has captured the attention of financial markets, political circles, and everyday consumers alike. In no small part, the crypto's growth can be attributed to its unique characteristics, including a limited supply, digital advantages, and the societal shift toward a more digital age.
In light of these factors, the current shaking of Bitcoin's price floor may suggest a purchasing opportunity that coincides with a bullish long-term outlook.
- Given the interest from Wall Street giants and successful Bitcoin ETFs attracting high returns, some investors might consider investing in Bitcoin, seeing its potential as a strategic reserve or a means to foster digital asset innovation.
- The fixed supply of Bitcoin, capped at 21 million, contributes to its rising value, making it a potential alternative to traditional fiat currencies, which can be debased through inflation.
- With the world's M2 money supply expanding and approaching $90 trillion, Bitcoin's scarcity could make it an attractive investment, as its value tends to rise with increasing demand due to expanding liquidity.
- As Bitcoin continues to gain traction and is compared favorably to gold in terms of finite supply and potential for serving as a store of value, its current price may provide an opportunity for investors seeking substantial long-term returns.
