Should You Buy Bitcoin While It’s Under $60,000?

Bitcoin (BTC 0.62%) has had a dramatic year so far. After rising rapidly at the beginning of the year, the cryptocurrency has fallen 20% in the past six months.

Bitcoin enthusiasts have not been deterred by the recent downturn, and their optimism is rooted in the fact that over the past five years, Bitcoin’s value has increased by 460% — compared to S&P 50099% increase.

But is it worth investing in Bitcoin now that it’s worth less than $60,000? Let’s take a closer look at why this crypto could move higher.

Bitcoin’s unique proposition

The one thing that continues to attract investors to Bitcoin is that only a limited amount of coins can be mined, which makes the cryptocurrency inherently limited. There are about 19.8 million Bitcoins right now, equal to about 94% of the total eventual supply.

Over time, it becomes more and more difficult to mine the new Bitcoin, and the final supply of 21 million coins will not be reached until 2140.

The limited supply of Bitcoin is why the crypto is attractive to so many people, especially when used as a hedge against the dollar. We are all aware of the negative effect inflation has on the value of money, and devaluation gets worse the more money the US government prints.

One way to protect against money devaluation is to invest in something that cannot be devalued by inflation or an increase in supply. While Bitcoin can certainly fall in value, and has fallen very dramatically at times, so far, it continues to become more valuable over time.

Bitcoin is less of a fringe investment than ever before

One of the good things about investing in Bitcoin now is that it has become much more of a regular investment. For example, it is easy to buy and sell Bitcoin through apps like Robinhood Markets and PayPal.

Even well-established financial companies have taken a more open approach to Bitcoin over the past few years. Visafor example, it allows customers to use cards linked to their crypto wallets for transactions.

There are also ways to invest in Bitcoin without owning the cryptocurrency. Earlier this year, the first Bitcoin exchange-traded funds (ETFs) were launched, including the popular ones iShares Bitcoin Trust ETFwhich allows people to invest in an ETF that tracks Bitcoin price movements.

Image source: Getty Images.

This means it’s just as easy to buy a Bitcoin ETF in your brokerage account as it is to buy other stocks or index funds, and you can sell it just as easily. This has made investing in Bitcoin easier than ever and could eventually attract more people to view Bitcoin as a viable investment.

Should You Buy Bitcoin Now?

If you have some extra cash in your portfolio, allocating a small portion of it to Bitcoin is probably a good idea in the long run. Its growing popularity among investors, its inherently limited supply that increases its value, and its growing acceptance among governments and financial institutions make investing in Bitcoin a potentially smart move.

It is worth noting that Bitcoin is likely to experience greater price fluctuations than most stocks. That’s why having no more than 5% to 10% of your portfolio in cryptocurrencies is generally a good idea.

With Bitcoin falling over the past six months, now might be the right time to dip your toe into the crypto waters. Just make sure you’re okay with some of the volatility it can bring to your portfolio.