Is Now the Right Time to Buy Bitcoin?

Of all the possible investments in recent history, Bitcoin is among the most discussed topics, and with good reason. Since the beginning of 2023, it has surged by 300%, much better than the Nasdaq Composite Index during the same period. It then tumbled by 11% after hitting an all-time high in March. It's a rollercoaster that has left many wondering whether now is the right time to buy Bitcoin, especially while trading below $70,000.

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I have been following Bitcoin for quite a while; the concerns are understandable when one invests in it. The biggest worry for many is that, like what happened in China, Bitcoin will get banned in the U.S. That can take a big dent out of its value and accessibility. Another concern is the potential threat from advanced technologies, like quantum computing, which might crack Bitcoin's cryptographic security. These risks are real and must not be ignored. The longer Bitcoin is in operation and the more popular it becomes, so too do the extent and depth of these risks.

Although these are pretty exciting concerns, in my opinion, the possible benefits associated with investing in Bitcoin still outweigh the associated risks. One of the most significant positive events lately has been the creation of Bitcoin spot ETFs. Since their approval by the Securities and Exchange Commission way back in January, it's much easier for anyone to invest in any one of them. More importantly, they add a layer of legitimacy to ever being recognized as an investment themselves. In years to come, this could be regarded as one of the most pivotal moments in history when Bitcoin was recognized as an outright asset.

In April, Bitcoin underwent another halving event. This is an event that occurs approximately every four years and cuts in half the number of new coins coming into the market. So far, these halving events have always catalyzed Bitcoin's price to increase. Many bullish investors do expect this reduction in supply to rally up further and spot Bitcoin at a new all-time high within the next 12 to 18 months. The price is usually driven higher whenever there is a supply shortage against steady or increasing demand.

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One of the things that makes Bitcoin so unique is its comparison to gold. Gold used to be thought of as a store of value for thousands of years.
Still, a few advantages give Bitcoin an edge over gold.

The supply of Bitcoin is capped at 21 million; hence, there will never be that many Bitcoins in circulation making it a rarity, as in the case of gold. It's easier to store and transfer than gold, and it's easier to make transactions with digital money than with gold. The market capitalization of Bitcoin is currently only a fraction of that of gold, so if it works like digital gold, there's much room to grow.

Another reason I'm so optimistic about Bitcoin is its potential as an alternative to traditional fiat currencies. The fiscal and monetary policies in most countries, over the past several decades, have been credibly both debt-fueled and inflationary.

All this by itself engenders changes that are devaluing over time. Bitcoin, on the other hand, is decentralized with a fixed supply. Given this, it enjoys an advantage in the eyes of every person who wants to hedge against inflation or the possible collapse of fiat. If more people begin attaching themselves to this narrative, then Bitcoin's price could continue rising, as has happened.

If all that is considered, Bitcoin at under $70,000 should be a good buy. There is nothing like an utterly risk-free investment. More considerable dangers with which the price might be stricken include regulatory crackdowns and technological threats. Unless you have faith in Bitcoin's long-term potential, as I do, perhaps now may be the right time to buy it at the current price.

Posted Using InLeo Alpha