Bitcoin (BTC +4.06%) continues to prove the skeptics wrong. After a wonderful 120% rise in 2024, the world's oldest and most valuable cryptocurrency has soared more than 440-fold during the past 10 years. It has outperformed every other major asset class, and it's not even close.
It now trades about 11% off its peak, which was set in mid-December. Is Bitcoin a once-in-a-decade buying opportunity now while it trades at about $95,000? Here are five reasons I believe it is.
Easier access
The Securities and Exchange Commission (SEC) approved spot Bitcoin exchange-traded funds (ETFs) exactly a year ago. These ETFs have found remarkable success, as billions of dollars have flowed into them.
It has become easy for anyone to gain exposure to Bitcoin in their portfolio. Increasing convenience and accessibility undoubtedly reduces friction for investors. This is what the spot ETFs have done, providing more demand for Bitcoin.
Favorable perception
Washington has become more accepting of Bitcoin. President-elect Donald Trump has said he'll create a Bitcoin strategic reserve, and he wants the U.S. to be more supportive of mining operations.
It's also worth mentioning that Trump's pick for Treasury secretary, Scott Bessent, owns hundreds of thousands of dollars' worth of Bitcoin ETFs (that he's said he will divest himself of to avoid conflicts of interest). His exposure to the leading crypto is a vote of confidence.
We're also seeing major financial institutions -- banks, asset managers, and hedge funds -- becoming bullish on Bitcoin. This positive sentiment only helps the digital asset's trajectory.
CRYPTO: BTC
Key Data Points
Currency debasement
Since the Great Recession, the M2 money supply of the four major central banks (in the U.S., China, Europe, and Japan) has more than doubled. They all pumped money into their respective economies to get out of that recession 15 years ago, as well as to keep things afloat during the coronavirus pandemic.
Here in the U.S., the burgeoning fiscal deficit means the dollar is always losing purchasing power. Here's where Bitcoin stands out, as its price has skyrocketed.
It's true that for Bitcoin's price to keep rising over time, investors need to learn more about its advantages over constantly debased fiat currencies. Bitcoin's fixed supply cap of 21 million coins and its decentralized and global user base make it a compelling asset. This is supported by the fact that there is really no end in sight to the federal government's growing debt burdens.
Stealing share
The total market cap of global equities, bonds, and real estate is estimated at $500 trillion. That is a gargantuan sum.
Based on its market cap of just about $1.9 trillion (as of Jan. 14), Bitcoin currently represents a minuscule amount of that wealth, but I don't believe it's out of the question that crypto could attract most of the capital that now goes to traditional financial assets.
Younger generations increasingly feel left behind by the current financial system. They may decide to put whatever investable assets they have into Bitcoin, which has higher return potential than other assets.
Passing gold
Bitcoin still offers meaningful upside. Gold has a market cap of about $18 trillion. Bitcoin is scarcer, and the crypto is more easily used in transactions, is portable, and is readily divisible. Plus, Bitcoin is only going to stand out more in a world that's becoming increasingly digital.
This means that a conservative view is for Bitcoin to rise almost 900% to reach gold's market cap. But it's reasonable to expect the digital asset's price to increase even more over time. That makes buying Bitcoin while it's at $95,000 a once-in-a-decade opportunity.
