Should You Buy Bitcoin While It’s Under $100,000?

while Bitcoin (BTC -1.55%) may be up 50% for the year, it’s safe to say the last six months haven’t gone according to plan for Bitcoin investors. After the Bitcoin halving in April, its price should have skyrocketed in value. But it just didn’t happen. At the current price of $63,000, Bitcoin is virtually unchanged since the halving.

That creates a choice for investors. Should you invest in Bitcoin now and hope it goes up in value, or would you be better off looking for other high-risk, high-reward assets?

The short and long term views

If you’re considering investing in Bitcoin now, you need to keep your expectations in check for the rest of the year. Right now, crypto prediction markets say that Bitcoin has about a 57% chance of hitting a new all-time high in 2024. In other words, it’s practically a coin flip if Bitcoin can regain its all-time high of $73,750 by present. the end of the year. At the same time, these crypto prediction markets also say that Bitcoin has only a 14% chance of hitting $100,000 this year.

The good news is that Bitcoin’s long-term outlook is much more optimistic. For example, investment firm Bernstein still believes that Bitcoin will reach $200,000 by the end of 2025. And several influential investors, including Cathie Wood of Ark Invest, remain confident that Bitcoin will reach $1 million by 2030. If are you willing to expand your horizons even further Michael Saylor, founder and executive chairman of MicroStrategy (MSTR -1.71%)believes that Bitcoin will reach $13 million by the year 2045.

So if you’re thinking in terms of the next few months, then Bitcoin is probably not the right investment for you. It is better to buy a high tech stock such as Nvidia (NVDA -0.18%)which is now growing at 159% per year. But if you think about the next five years, or possibly even beyond, then Bitcoin can still be a fantastic investment.

Can Bitcoin Become a “Financial Superhighway?”

Key to Bitcoin’s long-term investment appeal is its ability to become a much larger player in the global financial system. Remember: Bitcoin is not just a digital currency, it is also a blockchain technology. And this blockchain technology — with its promise of faster, cheaper and more efficient financial transactions — could revolutionize the global financial system.

Image source: Getty Images.

The term Wood uses to describe this potential is “financial superhighway,” which clearly evokes “information superhighway,” a term often heard at the dawn of the Internet era. It described how the Internet was used to transfer digital information around the world.

Replace “blockchain” with “internet” and replace “digital information” with “economic value” and you get the idea behind Bitcoin. It could completely change the modern financial system as we know it. In fact, Wood says it could hit $1.5 million in the next few years.

New political momentum

Of course, this is a big idea and one that should be viewed with quite a bit of skepticism. After all, people have been talking about Bitcoin’s revolutionary potential for more than a decade, and much of its promise as a payment technology is still unfulfilled. When was the last time you used Bitcoin to pay for something online?

But something fundamentally changed for Bitcoin this year: the emergence of a pro-Bitcoin political movement. There is a growing awareness that the United States is now lagging behind other parts of the world in crypto adoption. As a result, politicians like former President Donald Trump are now talking about turning America into the “crypto capital of the planet” and a “Bitcoin superpower.” There has even been talk of a “Bitcoin arms race” with other nations.

In July, Sen. Cynthia Lummis (R-Wyoming) proposed the creation of a national strategic Bitcoin reserve that would commit to buying 5% of all Bitcoins currently in circulation. The United States has a strategic national reserve of oil, she wonders, so why shouldn’t it also have a strategic reserve of Bitcoin?

How bullish should you be on Bitcoin?

These ideas might seem quixotic, or perhaps even dangerous. But they help explain why so many people are bullish on Bitcoin over the long term. They are also the reason so many people are predicting multi-million dollar price targets for Bitcoin. After all, Bitcoin isn’t going to hit $1 million just because people are buying spot Bitcoin ETFs.

From 2013 to date, the value of Bitcoin has increased from $100 to $63,000. If you think it could go a similar way over the next decade, and if you’re willing to accept the inherent risk and volatility of crypto, it might be worth adding Bitcoin to your portfolio while it’s trading below $100,000.