Bitcoin
3 reasons to buy Bitcoin like there’s no tomorrow
As Bitcoin becomes more and more popular, it gains the potential to grow in the long term.
The good news is that Bitcoin (Bitcoin -6.78%) represents an increase of 50% in the year. The bad news is that Bitcoin has been in decline for much of the last three months. Since reaching a new all-time high of $73,750 in mid-March, Bitcoin appears to have lost its charm and now trades for just $64,000.
But now is not the time to give up on Bitcoin. In fact, there are three good reasons why you should buy Bitcoin like there’s no tomorrow.
Bitcoin ETF Flows
The main factor that propelled Bitcoin to a new all-time high was the launch of Bitcoin spot exchange-traded funds (ETFs) in January. The huge investor enthusiasm for this new investment product led to huge new inflows into Bitcoin, and this led to a steady increase in the price. To date, more than $30 billion has been funneled into the new spot Bitcoin ETFs.
Although inflows have slowed recently, this new source of demand for Bitcoin is still a very important catalyst in both the short and long term. Right now, investors typically allocate around 1% of their portfolios to cryptocurrencies. But if they decide to increase that allocation to 3% or even 5%, then these new flows could really take off.
Furthermore, we have not yet seen the arrival of the largest institutional investors, such as sovereign wealth funds. But these could happen soon, according to leading asset managers.
This constant flow of new money provides a floor for the price of Bitcoin. Even if there is selling pressure in the crypto market, the flow of new money will help absorb it. And Bitcoin is still the only cryptocurrency with spot ETFs that can be traded.
Bitcoin is becoming popular
Some are waiting to invest in Bitcoin until it becomes fully mainstream. After all, for much of its history, Bitcoin has been dogged by concerns that somehow it’s all just a giant Ponzi scheme, or that the only people using Bitcoin are shady underworld criminals. This is why the new spot ETFs are so important – they open Bitcoin to the masses and come with a seal of approval from the Securities and Exchange Commission (SEC).
Furthermore, the list of Bitcoin converts continues to grow. These are people who once hated Bitcoin but are now embracing it. The list of converts started with hedge fund billionaires, who now see Bitcoin as a hedge against inflation and geopolitical risk. It then included Wall Street money managers, who began hearing from their institutional clients who wanted a way to invest in crypto.
And it now includes high-profile politicians and lawmakers, who are starting to see encryption as a campaign issue. Take former President Donald Trump. He is now positioning himself as the “president of crypto” and is suddenly very bullish on Bitcoin and Bitcoin mining. Meanwhile, congressional leaders are trying to enact new crypto-friendly legislation, and there are even rumors that the Biden administration may decide to become more pro-Bitcoin.
Bitcoin is the future of money
There is simply no better long-term investment narrative than the one surrounding Bitcoin. The Bitcoin algorithm guarantees that Bitcoin mining will exist for at least the next 100 years. At that point, Bitcoin will have reached its total lifetime supply of 21 million coins (about 19.7 million are now in circulation).
Image source: Getty Images.
I believe digital currencies are the future of money and that it’s really just a question of which one will come out on top. Perhaps central bank digital currencies I have the upper hand now, but my money is in Bitcoin.
It’s true that El Salvador is the only nation that has had any success with Bitcoin, and even that success is highly debatable. But many very smart people – including Cathie Wood of Ark Invest – are now tracking Bitcoin adoption in emerging markets. The more the adoption rate grows, the higher the value of Bitcoin could be.
How high can Bitcoin go?
As Bitcoin becomes increasingly popular, its price should continue to rise. Research and brokerage firm Bernstein predicts that the price of Bitcoin could reach $200,000 by 2025, and from there, the sky is the limit. Cathie Wood, for example, is predicting that Bitcoin will reach $1 million before 2030.
This is why I’m buying Bitcoin like there’s no tomorrow. A small initial investment today could skyrocket in value in just five years. Just remember to buckle up for the ride – if Bitcoin takes off for its $1 million moonshot, there’s bound to be a lot of turbulence along the way.