Bitcoin (BTC 0.60%) has fallen more than 35% from its all-time high, plunging well below that $100,000 milestone.
Why? It could be several things. Generally speaking, investors have been shying away from riskier assets in recent weeks. What's clear, though, is that Bitcoin's decline is normal. It suffered a decline nearly twice as dramatic as recently as 2023.
Meanwhile, Bitcoin's price has risen by an astronomical 20,900% over the past decade, even after the recent dip. Nobody can know for sure what the future holds, but no one has gotten wealthy from Bitcoin without stomaching some volatility along the way.
Here are three reasons why it's the best cryptocurrency to spend $100 on right now.
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1. Bitcoin has historically survived crypto downturns
Cryptocurrencies as a whole are very risky investments. The broader space has gone through violent ups and downs over the years. If this is the beginning of another cryptocurrency bear market, you'll want to own the largest and most established cryptocurrency of them all.
Some merchants now accept Bitcoin as payment, institutions are launching Bitcoin investment funds, and both individuals and companies are accumulating it as an asset. That at least provides some support, though there's technically no price floor.
2. Its anti-inflationary appeal isn't going away
One of Bitcoin's primary functions is as an anti-inflationary asset, akin to digital gold. Priced in U.S. dollars, a fiat currency, Bitcoin's price has risen as the expanding monetary supply has weakened the U.S. dollar's purchasing power over the years.
CRYPTO: BTC
Key Data Points
This is a decades-long trend, and it's hard to envision anything changing while the U.S. government continues to operate at a fiscal deficit. Investors should keep in mind that Bitcoin remains a speculative asset, so it has declined while gold prices have continued to soar. Eventually, the market may again favor riskier assets, sending Bitcoin back on its upward trajectory.
3. The U.S. government is putting its weight behind cryptocurrencies
It's hard to get a more decisive vote of confidence than from the U.S. government. President Donald Trump campaigned on support for cryptocurrencies and announced an executive order last year directing the government to establish a strategic reserve for Bitcoin and other digital assets. The reserve currently holds an estimated 207,189 BTC.
Bitcoin's long-term value requires continued adoption to drive demand, and therefore market prices, higher. With the U.S. government backing Bitcoin, institutions may change how they view it and other cryptocurrencies. Continued real-world use cases, such as payment acceptance and financial products, all collectively move the needle over time.
Investors shouldn't go all-in on Bitcoin. Instead, include it as part of a diversified portfolio. That makes investing $100 into Bitcoin a fantastic idea, especially now after its recent decline.
