Bitcoin is just getting started and has plenty more upside to offer investors.
As alluring as cryptocurrencies can be, they are risky. While the blockchain technology powering these assets is innovative and holds the potential to transform finance as we know it, their role in the future remains ambiguous and borderline obscure.
Yet, there is one cryptocurrency with a proven role that provides investors with the safest exposure to the best the cryptocurrency market has to offer. Here’s why I’m buying Bitcoin (BTC -0.55%) like there is no tomorrow.
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1. The halving effect
On April 19, Bitcoin underwent its fourth halving. Occurring roughly every four years, halvings form the foundation of Bitcoin’s robust monetary policy, which prioritizes scarcity value preservation by reducing its inflation by half. With the fourth halving now passed, Bitcoin’s inflation rate now stands at just 0.85%. That makes it less inflationary than what many believe to be the superior store of value and inflation hedge, gold.
Over the long haul, it’s easy to see how continued reductions to its inflation rate will benefit Bitcoin’s price growth. Should demand for the cryptocurrency continue to increase, its diminishing inflation rate will exert more pressure on its finite supply of 21 million coins. Add it all up, and you have the perfect recipe for price appreciation.
Even in the short term, the halving’s effect makes Bitcoin a viable investment today. In the years when a halving occurs, Bitcoin grows by 125% on average. When measured from the beginning of the year, that would put its price at just over $100,000, meaning there is still generous potential for returns today even with its price at roughly $65,000. Yet, the best that Bitcoin has to offer usually materializes in the year after a halving. Historically, during these years, Bitcoin increased by more than 400%.
2. Greatest institutional interest and the clearest role in the financial landscape
For most of Bitcoin’s existence, its rise to the top was driven by retail investors. But now things are about to change. With the approval of spot Bitcoin…
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