Is Buying Bitcoin Below $70,000 A Big Brain Move?

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As a seasoned analyst with over two decades of experience in the financial markets, I have witnessed countless shifts and trends that have shaped the investment landscape. Having closely followed Bitcoin since its inception, I must say that its resilience, innovation, and potential have consistently piqued my interest.

As a crypto investor, I’ve noticed that Bitcoin has maintained its footing for several months now, demonstrating resilience even amidst market fluctuations. Following a significant surge of approximately 48% at the beginning of 2024, it reached an all-time high in March, but unfortunately, it hasn’t quite taken off into the bull run that many had anticipated.

Based on the Bitcoin Liquid Index from Brave New Coin, Bitcoin’s price remains under $70,000, even though it previously reached $73,400, leading one to ponder if this could be a good opportunity for investment.

A glimmer of hope comes from the Federal Reserve’s recent move to reduce interest rates for the first time in more than four years. This decrease in rates typically encourages investors to consider riskier investments, potentially making Bitcoin more attractive to crypto enthusiasts seeking increased returns.

Furthermore, the introduction of Bitcoin exchange-traded funds (ETFs) for trading has become widely accepted. These ETFs make it easier for individuals to invest in Bitcoin as they eliminate the hassle of directly purchasing and safeguarding it. This simplicity could potentially lure more investors, thereby increasing demand.

Cumulative net inflows into spot Bitcoin ETFs have surpassed $20 billion since their launch earlier this year. It took gold ETFs 5 years to reach this figure. That makes the Bitcoin ETFs the most successful launch of any ETF in history.

Eric Balchunas, Senior ETF Analyst for Bloomberg recently noted on platform X that “Bitcoin ETFs have surpassed $20 billion in total net inflows for the first time following a substantial week of $1.5 billion. This is an important figure and a challenging metric to expand within the ETF industry. It took gold ETFs around 5 years to reach the same level. The current total assets now stand at $65 billion, another record high.

The regulatory landscape for Bitcoin appears to be brightening, irrespective of the outcome of the forthcoming U.S. Presidential election. An advantageous regulatory climate might bolster Bitcoin’s credibility, making it more alluring to average investors.

Bitcoin’s Unique Characteristics and Long-Term Potential

Examining Bitcoin individually, its original features are noteworthy. Born 15 years ago, Bitcoin was the pioneering cryptocurrency that made it possible for two individuals to electronically transfer funds without a financial intermediary like a bank. This innovation introduced a fresh dimension of financial freedom and productivity, paving the way for digital currencies’ future advancements.

As an analyst, I find the capped supply of Bitcoin to be one of its most distinctive features. With a maximum limit of 21 million coins, only around 19.8 million are currently in circulation. This sets it apart from traditional fiat currencies that can be printed in virtually unlimited quantities. The capped supply serves as a crucial element, emphasizing Bitcoin’s value proposition as a deflationary asset.

While past performance is not a guarantee of future results, Bitcoin’s historical track record is impressive. According to BlackRock, Bitcoin outperformed every major asset class in seven out of ten years from the start of 2014 through 2023. This strong performance highlights Bitcoin’s potential as a high-yield investment over the long term.

2024 has seen Bitcoin surge approximately 60% so far, outperforming the S&P 500 significantly. This impressive growth this year underscores the claim that Bitcoin continues to be a promising investment opportunity, despite trading below the $70,000 mark.

The 2024 Presidential Election Candidates Support Bitcoin

For the first time, Bitcoin has emerged as a significant topic in a presidential race. As the November election draws near, former President Donald Trump has taken up a stance supportive of Bitcoin. He’s generally viewed as someone who might endorse Bitcoin should he secure another term in office.

Donald Trump has expressed interest in backing the American Bitcoin mining sector. He’s proposed establishing a national Bitcoin reserve and suggested that Bitcoin could help reduce our staggering $35 trillion debt. Moreover, he’s made it clear that he intends to replace SEC chairman Gary Gensler, who some perceive as an obstacle to Bitcoin’s expansion within the nation.

If Trump gets elected, it might greatly benefit Bitcoin. Even if someone else wins, the political landscape seems to be moving in Bitcoin’s direction. At the moment, the U.S. presidential election is too close to call. This ambiguity could be why some investors are hesitant. Regardless, the result of this election could have a substantial impact on Bitcoin’s future trajectory.

Given the current circumstances, purchasing Bitcoin when its price is under $70,000 could be a shrewd decision for numerous investors, provided they possess a long-term perspective and are ready to endure market fluctuations.

As an analyst, I find the confluence of advantageous monetary policies, the successful launch of Bitcoin ETFs, and the supportive stance towards Bitcoin by 2024 presidential candidates, highly persuasive when considering investment opportunities. Furthermore, Bitcoin’s past performance and limited supply serve as robust indicators of its potential to generate substantial returns in the long run.

As the data below shows, on a long enough time horizon, Bitcoin will outperform most other assets. 

 

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2024-11-03 09:28