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Should you buy Bitcoin while it is below $70,000?
From the beginning of 2023, Bitcoin (CRYPTO: BTC) has been one of the best assets to own. Its price rose about 300% during that period (as of June 14), a better gain than the 69% increase in the Nasdaq composite index.
But it’s been a roller coaster since Bitcoin hit its all-time high in March. At the time of writing this article, the the best cryptocurrency it is down 11% from that peak.
Should investors consider buying Bitcoin while it trades for under $70,000?
Bear case
Perhaps the most obvious argument against Bitcoin is that it could be banned in the United States, just as it has been in China. Others speculate that computational advances, coming from artificial intelligence or quantum computing, could crack Bitcoin’s cryptographic structure.
These are all valid points. And the longer the network is active and gains in popularity, the greater these risks could become.
Toro case
Understanding the bear case is critical to gaining an in-depth perspective on an asset. But I believe Bitcoin’s bullish arguments carry more weight.
Spot exchange-traded funds have brought more capital into the mix making it easier to buy Bitcoin. But these funds, approved by the Securities and Exchange Commission in January, also gave a stamp of legitimacy to the cryptocurrency. When we look back on this event years later, we will likely see it as a seminal moment when Bitcoin officially arrived.
In April, Bitcoin suffered another one halving, an event that occurs roughly every four years and halves the new supply of coins entering the market. This has always been a catalyst for Bitcoin. Bullish investors expect Bitcoin to reach a new all-time high in the next 12-18 months.
And investors should think about what makes Bitcoin unique in the first place. It is often compared to gold. The precious metal has been considered a major store of value for thousands of years. However, the eventual total supply of Bitcoin is mathematically limited and there will never be more than 21 million coins. And Bitcoin is easier to store and transport than gold, while also possessing easier transaction value.
However, Bitcoin’s current market capitalization of $1.3 trillion is only 8% of gold’s $15.7 trillion. In a world that is becoming increasingly digital, tech-enabled and connected, I think it is reasonable to expect that major cryptocurrencies could one day reach the same valuation as gold. This would imply an upside of 1,100%.
Bitcoin is also special because it is an alternative to the inflationary, debt-fueled fiscal and monetary policies that have characterized the United States, as well as other countries, in recent decades. Many economists have argued that this path is not sustainable.
The story continues
If more people start to believe these arguments, they may very well want to own an asset like Bitcoin that isn’t controlled by a central bank. As fiat currencies continue to lose value over time, Bitcoin, which has a fixed supply limit, may continue to increase in value as it has in the past.
Buying some of this cryptocurrency for under $70,000 seems like a smart decision.
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Neil Patel and its clients have no position in any of the securities mentioned. The Motley Fool has positions and recommends Bitcoin. The Motley Fool has a disclosure policy.
Should you buy Bitcoin while it is below $70,000? was originally published by The Motley Fool