The good news is that Bitcoin (CRYPTO: BTC) has increased by 50% this year. The bad news is that Bitcoin has been in a downward spiral for most of the past three months. Since hitting a new all-time high of $73,750 in mid-March, Bitcoin appears to have lost its mojo and is now trading for as low as $64,000.
But now is not the time to give up on Bitcoin. In fact, there are three very good reasons why you should buy Bitcoin like there is no tomorrow.
Bitcoin ETF flows
The main factor that pushed Bitcoin to a new all-time high was the launch of spot Bitcoin Exchange-Traded Funds (ETFs) in January. Investors’ overwhelming enthusiasm for this new investment product led to massive new inflows into Bitcoin, leading to a steady price increase. To date, more than $30 billion has flowed into the new spot Bitcoin ETFs.
Although inflows have slowed lately, this new source of Bitcoin demand is still a very important catalyst in both the short and long term. Currently, investors typically allocate around 1% of their portfolios to crypto. But if they decide to increase that allocation to 3% or even 5%, this new influx could really take off.
Moreover, we have still not seen the arrival of the largest institutional investors, such as sovereign wealth funds. But according to top asset managers, this could happen soon.
This steady flow of new money provides a floor for Bitcoin’s price. Even if there is selling pressure in the crypto market, the flow of new money will help absorb it. And Bitcoin is still the only crypto with spot ETFs available for trading.
Bitcoin is going mainstream
Some have waited to invest in Bitcoin until it becomes fully mainstream. After all, Bitcoin has been dogged for much of its history by concerns that it’s all somehow just a giant Ponzi scheme, or that the only people using Bitcoin are shadowy underworld criminals. That’s why the new spot ETFs are so important: they open Bitcoin up to the masses and come with a seal of approval from the Securities and Exchange Commission (SEC).
Moreover, the list of Bitcoin converts continues to grow. These are people who used to hate Bitcoin, but now embrace it. The list of converts started with hedge fund billionaires, who now view Bitcoin as a hedge against inflation and geopolitical risks. Then it involved Wall Street money managers, who started hearing from their institutional clients that they wanted a way to invest in crypto.
And now it also includes high-profile politicians and lawmakers, who are starting to see crypto as a campaign issue. Take former President Donald Trump. He is now positioning himself as the ‘crypto president’ and is suddenly very optimistic about Bitcoin and Bitcoin mining. Meanwhile, congressional leaders are trying to pass new crypto-friendly legislation, and there are even rumors that the Biden administration could decide to become more pro-Bitcoin.
Bitcoin is the future of money
There is simply no better long-term investment story than the one surrounding Bitcoin. The Bitcoin algorithm ensures that Bitcoin mining will exist for at least the next 100 years. At that point, Bitcoin will have reached its total lifetime supply of 21 million coins (there are now approximately 19.7 million in circulation).
I believe that digital currencies are the future of money and that it is really just a question of who will come out on top. Maybe central bank digital currencies have the edge right now, but my money is on Bitcoin.
Granted, El Salvador is the only country that has had any success with Bitcoin, and even that success is highly questionable. But many very smart people – including Cathie Wood of Ark Invest – are now tracking Bitcoin adoption in emerging markets. The more the adoption rate grows, the higher Bitcoin’s valuation could go.
How High Can Bitcoin Go?
As Bitcoin becomes more and more mainstream, its price should continue to rise. Research and brokerage firm Bernstein predicts that Bitcoin’s price could reach $200,000 by 2025, and the sky is the limit from then on. For example, Cathie Wood predicts that Bitcoin will reach $1 million sometime before 2030.
That’s why I buy Bitcoin like there is no tomorrow. Today, a small upfront investment can skyrocket in value in just five years. Don’t forget to buckle up for the ride — if Bitcoin rockets away from its $1 million moonshot, there’s sure to be plenty of turbulence along the way.
Should you invest $1,000 in Bitcoin now?
Consider the following before buying shares of Bitcoin:
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Dominic Basulto has positions in Bitcoin. The Motley Fool holds and recommends positions in Bitcoin. The Motley Fool has a disclosure policy.
3 Reasons to Buy Bitcoin Like There’s No Tomorrow was originally published by The Motley Fool
