After rising interest rates crushed the cryptocurrency market in 2022, this year has been a completely different story. The entire market for digital assets is currently valued at $1 trillion, up from roughly $800 billion at the start of the year.
Investors might be considering the volatile asset class as a fertile hunting ground for opportunities. But due to the tens of thousands of cryptocurrencies out there, it can seem like a daunting task to try to pick one. That's why I think it's best to keep things as simple as possible.
With that thinking, Bitcoin (BTC -1.77%) is easily my top cryptocurrency to buy in the month of September. Here's why.
Cutting the inflation rate in half
What makes now a particularly opportune time to buy Bitcoin is the upcoming halving that's slated to take place in April 2024. Roughly every four years, Bitcoin's supply growth rate gets cut in half, which just means that the reward miners receive to approve transactions and create blocks is reduced. With decreasing new supply hitting the market, and demand that has generally trended higher over time, the ingredients are there for Bitcoin to go up.
Historically speaking, the several months leading up to a halving has typically been a fantastic time to buy Bitcoin, making it a top crypto to add to your portfolio in September. In fact, after the spring of next year, Bitcoin's supply growth will be lower than gold's, an extremely positive development.
Speaking of demand, Bitcoin's price could get a major boost should the Securities and Exchange Commission approve the numerous applications to launch spot Bitcoin exchange-traded funds (ETFs), which could open the floodgates to greater levels of institutional capital flowing into the top digital asset. And that could drive Bitcoin higher to new levels.
Lots of positive attributes
Besides the near-term catalysts in both the impending halving and the potential for a spot Bitcoin ETF to hit the market, there are many other reasons Bitcoin is the best cryptocurrency to own. It's a good idea to zoom out and focus on these attractive characteristics.
For starters, Bitcoin is the only digital asset that is truly decentralized. Another popular crypto, Ethereum, has a governing body and well-known developers who can alter the update pipeline and token strategy without any approval from the rest of the community. Bitcoin's founder, Satoshi Nakamoto, is anonymous, and any proposed technical changes to the network need to be approved by the majority of the users. Cryptocurrencies were meant to take power away from large controlling entities and move it to the community. Bitcoin does just this.
Although Bitcoin's proof-of-work consensus algorithm is viewed by many as a waste of electricity, it's actually a feature of the network. Bitcoin is trying to fix the problems with the fiat-backed monetary system, which has resulted in a huge and growing debt burden and relentless devaluation of currencies. By requiring real-world expenses in the form of computing power and electricity use, the creation of new coins has a tangible cost. New money simply can't be created out of thin air like what we've seen from the Federal Reserve and other central banks.
Most investors who follow Bitcoin and crypto know that there will only ever be 21 million coins in existence. This hard cap possibly makes Bitcoin the best store-of-value asset ever invented. Naysayers will quickly point to Bitcoin's high volatility as a valid reason that it's not a good store of value. But consider that in the last decade, its value has skyrocketed roughly 20,000%, trouncing the 45% gain of gold during that time. Despite the roller-coaster ride, investors who owned Bitcoin have seen their purchasing power grow much faster than pretty much any other asset.
At a current price that's 62% off its all-time high, Bitcoin is a no-brainer buy right now in the month of September.
