When investing, it often pays to keep things simple. Only invest in what you understand. Don't invest in fads and short-term momentum plays. And whenever possible, avoid letting your emotions take over and spoil your decision-making process.
For that reason, Bitcoin (BTC 2.66%) is the smartest cryptocurrency to buy right now. Sure, there might be other cryptocurrencies with more hype and buzz around them. And yes, some cryptocurrencies are outperforming Bitcoin in 2025. But over the long haul, a no-nonsense $1,000 investment in the world's most popular cryptocurrency could pay off big.
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An unbeatable track record of success
Everyone by now is familiar with Bitcoin's famous volatility. Higher volatility means the potential for sharp spikes upward in price. As a result, Bitcoin has been capable of generating huge returns on an annual basis.
But the really amazing part about Bitcoin is how it has managed to keep up this performance over such an extended period of time. In March 2024, WisdomTree (WT -2.41%) analyzed the returns of nine major asset classes during a 12-year period (2012-2023).
What the investment firm found is truly eye-opening. In nine of those 12 years, Bitcoin was the top-performing asset in the world. In most years, it wasn't even close. In 2023, for example, Bitcoin turned in an awe-inspiring performance of 157%, while the next closest competitor (the S&P 500) was up only 26%.
Cathie Wood of Ark Invest has also highlighted the extraordinary ability of Bitcoin to turn in record-setting performances, year after year. In her firm's "Big Ideas 2024" report, she showed that Bitcoin has outperformed every major asset class over long periods of time.
After examining Bitcoin's performance over three, four, five, six, and seven-year intervals, the results were indisputable. The longer you held Bitcoin, the better you did. But there was one major proviso: you had to hold Bitcoin for a minimum of five years.
That's because Bitcoin typically follows a four-year cycle. You need to hold Bitcoin that extra fifth year to make sure you overcome the one down year in the four-year cycle.
Unlimited future upside
Obviously, Bitcoin has been a stellar performer during the past decade. But what about Bitcoin's expected performance during the next decade?
That's where the Bitcoin story gets even better. According to a growing number of investors, Bitcoin is on a glide path to a price of $1 million. Coinbase Global (COIN 2.61%) Chief Executive Officer Brian Armstrong thinks Bitcoin will get to $1 million by 2030. And Cathie Wood thinks it could happen even earlier than that.
Even a $1 million price target might be understating the upside potential of Bitcoin. According to Michael Saylor, founder and executive chairman of Bitcoin treasury company Strategy (MSTR 5.03%), Bitcoin could hit a price of $21 million per coin within 21 years.
Can Bitcoin still deliver triple-digit percentage returns?
But just how much longer can Bitcoin continue to deliver triple-digit percentage returns to investors? It seems almost impossible that an asset can continue to double in value, year after year.
Although Bitcoin is still up for the year, it seems to have lost some of its characteristic volatility. Quite simply, the highs are not as high, and the lows are not as low. Bitcoin has been trading in a range between $100,000 and $125,000 since May.
On one hand, a decline in volatility is good news. It means you don't have to worry about going to bed and then waking up in the morning, only to see the value of your Bitcoin holdings sliced in half.
On the other hand, it's bad news. It means that Bitcoin is starting to trade much more like a traditional asset. Over the long haul, Bitcoin investors might need to settle for much lower returns than in the past.
Take this year, for example. There's a pro-crypto administration in the White House, and plenty of Bitcoin treasury companies gobbling up Bitcoin at a prodigious rate. Yet, the price of Bitcoin is only up 24% this year. What if that becomes the new normal?
What's next for Bitcoin?
While Bitcoin may be hard-pressed to deliver 100% returns in the future, I can't think of a smarter cryptocurrency to buy with $1,000 right now. Even if Bitcoin only grows at a compound annual growth rate (CAGR) of 50% per year, it can still hit the $1 million price target in five years. That sounds like a smart investment to me.
