As of this writing, the overall cryptocurrency industry carries a market cap of $2.7 trillion. Investors have undoubtedly warmed up to digital assets in the past year or so, following the crypto winter of 2022.
The world's most valuable cryptocurrency, Bitcoin (BTC -1.89%), is getting a lot of attention amid the market's resurgence. Its price has skyrocketed 340% since the start of 2023, thanks to a number of positive developments, and is now in record territory.
It's understandable if you believe that the best move is to wait until there's a huge pullback. But I think that would be a mistake. Bitcoin still has huge upside, which makes it the ultimate cryptocurrency to buy with $1,000 right now.
Benefiting from powerful catalysts
In January, the Securities and Exchange Commission approved the launch of spot Bitcoin exchange-traded funds (ETFs), which was a monumental event for the industry. It basically turned Bitcoin into a legitimate financial asset in the eyes of regulators and Wall Street, after years of being viewed as a useless investment reserved for cypherpunks.
The big breakthrough means that now it is effortless to gain Bitcoin exposure via a regulated investment vehicle. And because of this, investors have flocked to the crypto. BlackRock's ETF alone has attracted nearly $16 billion. That has certainly helped to drive up the price.
It is also likely benefiting from anticipation of the upcoming halving. This happens every four years, and it cuts the supply of new bitcoins entering the market in half.
Historically, the halving has been an extremely bullish event for the price of the crypto. And so far this year, we're seeing a similar trend play out. The next 12 to 18 months could see a continuation of the bull market.
I think another catalyst, one that's more powerful and enduring, is the growing interest in owning an asset outside of the current financial system. People have seen over the past few years just how rapidly global debt has ballooned. This is becoming a bigger problem in the U.S. And there is no reason to believe it is going to change anytime soon.
It's likely that increasing numbers of investors see the situation as unsustainable. Putting some money into Bitcoin -- what could be a financial hedge -- seems like the right move.
A store of value
Even at all-time highs, I believe Bitcoin still has room to run. In fact, it could be one of the most promising investments if we view things with a 5- or 10-year outlook. This thesis rests on Bitcoin becoming an attractive store of value in the eyes of individual and institutional investors, as well as corporations and governments.
Bitcoin's defining characteristic has to be that it has a fixed supply cap of 21 million, of which about 19.7 million now are in circulation. This is in stark contrast to most other cryptocurrencies out there. And it makes it superior to holding the U.S. dollar, which continues to lose purchasing power with each passing year.
It makes sense to compare Bitcoin to gold. But even this comparison clearly shows that the precious metal is inferior. Consequently, the digital coin's current market cap of $1.4 trillion could not only one day rise 10-fold to get to par with gold's global value, but it also could even exceed it. That's a very real possibility.
Bitcoin is only about 15 years old. It still has a long way to go to become an established asset class. And this translates into sizable upside, even though it's at peak prices today.
