Even with Bitcoin (BTC -1.51%) soaring to new heights, and all the new enthusiasm surrounding the new spot Bitcoin exchange-traded funds (ETFs), the crypto industry is still struggling to attract new investors. According to the Motley Fool Ascent's 2024 Cryptocurrency Investor Trends Survey, the core demographic for crypto remains Gen Z and young millennial men.
That's particularly surprising, given that we keep hearing about crypto finally going mainstream. Even more surprising, one of the reasons offered by the skeptics for not investing in crypto is that it's too expensive. That's simply not the case. Here's why.
Bitcoin sticker shock
There are various ways to interpret cost as the reason for not investing in crypto. But probably the most likely interpretation is something that can only be described as Bitcoin sticker shock. Imagine the scenario: You finally make up your mind to buy a little Bitcoin, but you check the current price, and it's well above $70,000. Immediately, you decide that Bitcoin is not for you.
Image source: Getty Images.
But that's a remarkably short-sighted view of the matter. For one, you don't have to buy a whole Bitcoin. It's just as simple to buy a fractional share. In fact, many popular crypto trading platforms allow you to trade with as little as $1. For that small amount of cash, and given today's prices, you can be the proud owner of .00001 of a Bitcoin.
So buying Bitcoin is not like buying a brand-new Tesla Cybertruck. Both might cost roughly the same, but there's absolutely no way you're driving a fractional Tesla Cybertruck off the lot.
Even if you're averse to buying fractional shares of Bitcoin, there are still ways to bring down the cost of Bitcoin ownership. For example, you could get exposure to Bitcoin through any of the new spot Bitcoin ETFs. These track the performance of Bitcoin, and the two most popular spot Bitcoin ETFs -- the iShares Bitcoin Trust (IBIT -1.27%) and the Fidelity Wise Origin Bitcoin Trust (FBTC -1.26%) -- are still priced below $70. If you're dealing with Bitcoin sticker shock, this much lower entry price for a crypto ETF might be enough to help you get past the psychological barrier of a very high Bitcoin price.
Is Bitcoin overvalued or undervalued?
Another way to interpret the "too expensive" excuse is that investors perceive Bitcoin to be overvalued at its current price. Given that Bitcoin just hit a new all-time high of $73,750 in mid-March, it's easy to see why some people might think it's better to wait for a pullback in price so that they can buy Bitcoin at a discount.
While buying the dip is certainly a valid strategy for buying Bitcoin, I don't think most people have this in mind. Instead, they are probably thinking that it's simply too late to invest in Bitcoin. After all, Bitcoin has been on a meteoric rise from $1 to $70,000 during the past decade or so, and many might conclude that Bitcoin doesn't have as much upside potential over the next decade.
But that's not what the conventional thinking is on Wall Street right now. The growing consensus is that Bitcoin will hit $100,000 by the end of 2024, and $150,000 by the end of 2025.
And from there, the sky's the limit. According to Cathie Wood of Ark Invest, the price of Bitcoin could hit $3.8 million by 2030. If you invest now, there's still the potential to make a nearly 50-fold return on your investment! So if anything, Bitcoin is undervalued, not overvalued, at its current price.
Forget about low-budget cryptos
The real drawback to the argument that Bitcoin is overvalued is that it tends to force people into buying really, really, really cheap meme coins. With a few exceptions, many of these meme coins trade for well under $1. For example, Shiba Inu (SHIB -5.09%) trades for an unbelievably low price of just $0.00003.
But does anyone really think Shiba Inu is a better investment than Bitcoin? Does anyone really believe that loading up on dog-themed meme coins is a better long-term play than buying fractional shares of Bitcoin? If the answer is "yes," then I have a simple response: You get what you pay for.
