Bitcoin (BTC -0.28%) has been a hot topic in the financial world for years, with opinions about the cryptocurrency running the gamut from a "revolutionary new asset class" to a "dangerous speculative bubble." One thing that most experts can agree on, however, is that its volatility has historically made it a less-than-ideal safe-haven asset. But recent market movements seemed to have changed that tune. There are fewer sad trombones and more sparkly vibraphone grooves in the Bitcoin canticle nowadays.

But is the cryptocurrency really ready to serve as a long-term vault for your hard-earned wealth? Let's look closer at Bitcoin's suitability for that august role in light of recent data and expert analyses.

What's going on?

Bitcoin has been on a tear since the beginning of 2023, rising 45% since the start of the year. On the other hand, the S&P 500 (^GSPC -0.16%) index is up by a mere 0.8% over the same period, and gold has gained 2.6%.

Zooming out to a three-year view, you'll find that Bitcoin has outperformed the traditional safe havens of gold and broad stock market indexes again. This time, gold is up by 19%. The S&P 500's dividend-adjusted total return stops at 49%. Over the same span, Bitcoin soared 367% higher.

And if you allow me to go back six years instead, incorporating the surge of 2017 and the 2018 crypto winter into the data, we can see how a $10,000 investment in Bitcoin has performed against gold and the S&P 500 since the spring of 2017:

6-year Bitcoin Price Chart vs. Gold and the S&P 500

Bitcoin Price data by YCharts

Of course, past performance is not a reliable indicator of future results. Bitcoin is notoriously volatile, and its value could plummet just as quickly as it has risen. The chart above, impressive as it is, also shows many dramatic price drops over the years.

But it seems that Bitcoin has finally established itself as a contender in the category of safe-haven assets. As investors seek out alternatives to traditional value stores, like precious metals or diverse stock market indexes, Bitcoin's unique characteristics and limited supply could make it an attractive option for those looking to protect their wealth against inflation and currency fluctuations.

And that's right in line with the original intentions of Satoshi Nakamoto, Bitcoin's unknown inventor (or group of inventors). The cryptocurrency was designed to resist inflation through a lifetime maximum of 21 million digital coins, and 19.3 million of them are already minted. This capped long-term supply is similar to the limited amount of gold on the planet, which is why Bitcoin bulls often refer to it as "digital gold."

Expert analysis

Despite its volatility, some market experts believe that Bitcoin could continue to serve as a safe-haven asset in the future. Beyond the gold-like supply-and-demand equation, some Bitcoin gurus point to the growing interest from institutional investors and large corporations. As a result, the cryptocurrency may be becoming more mainstream and accepted as a legitimate asset class.

In fact, companies like Tesla (TSLA 0.79%) and Block (SQ 0.37%) have even added Bitcoin to their balance sheets, further signaling their confidence in the cryptocurrency. Taking that idea to its next logical step, business software builder MicroStrategy (MSTR 1.25%) has converted most of its cash reserves into Bitcoin -- and keeps buying more coins financed by a combination of cash flows, loans, and stock sales.

deVere Group CEO Nigel Green calls the current banking crisis a "springboard event" for Bitcoin as traditional-minded investors start to treat the digital asset as a safe port in the storm. The financial shake-up may inspire others to follow in the steps of Tesla, Block, and MicroStrategy. Massive long-term inflation of the U.S. dollar is a critical part of this scenario: "Investors are therefore looking for alternative currencies, such as cryptocurrencies," Green writes in a recent press release. "Moving forward, these will increasingly compete with traditional, fiat ones, and this will help trigger the decreasing dominance of currently leading international currencies."

What's next for Bitcoin holders with "diamond hands"?

Nobody knows for sure where Bitcoin is going next. The crypto winter may be thawing as we speak, or another cold snap could bring Bitcoin prices down again in 2023.

But I think it's abundantly clear by now that cryptocurrencies are here to stay, and that Bitcoin will probably be a reliable store of wealth for many years. MicroStrategy chairman Michael Saylor may be onto something after all. Truly committed Bitcoin bulls with diamond hands should see stellar results a few years down the road.

That being said, I still don't want to convert my entire net worth into Bitcoin and take out loans to buy more. Leave that to the professional risk-takers for now. Instead, I'm happy with a modest Bitcoin position that could serve me well in the long run without adding much short-term risk. It's a good place to park cash you won't need for at least a year or two, allowing Bitcoin to get over speed bumps and challenges on the road to sustained wealth. In fact, that's how I think about all investments. Saintly patience is arguably the best quality an investor could have. Just ask Warren Buffett or Peter Lynch.