Bitcoin’s price is notoriously volatile. One minute, it’s soaring. The next, it’s crashing. This wild price action can be intimidating if you’ve just started hearing about Bitcoin and want to make money with it. What if you buy a Bitcoin only to see its price crash a few days later? Will you lose all your money? These are legitimate questions. After all, you want to make money with Bitcoin, not lose it. This article will help you tackle your fears and confidently understand effective strategies for investing in Bitcoin to enable you to generate profits and navigate the BTC market successfully as a newcomer.
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Bitcoin Nears Historic Highs but Huge Growth Is Still Ahead
Bitcoin’s recent price action has been impressive, with the asset approaching its all-time high. As of this writing, Bitcoin is trading around $72k, showing strong momentum in the market. Bitcoin rose about 6% to as high as $73,544 at about 3pm EDT, or 7 p.m. Greenwich Mean Time, Tuesday, the highest price for the token since March 14 (price movements in the 24/7 Bitcoin market is most commonly measured in GMT). While the current short-term price action is exciting, it’s critical to remember that no matter what happens over the next weeks and months, over the long term Bitcoin is going much, much higher. How high? Let’s walk through it.
That moves Bitcoin’s October gain to 13%, outstripping the leading American stock index S&P 500’s 1% advance this month. Over the past decade, Bitcoin has been the best-performing asset. With an astounding average annual growth rate of 59%, it has far outpaced traditional investments:
- Stocks: 15% average annual growth
- Commodities: 12%
- Gold: 9.4%
- Real Estate: 5.6%
- Emerging Markets: 2.6%
- Bonds: 0.78%
Institutional Adoption Is Driving Bitcoin Demand
Several key factors contribute to Bitcoin’s sustained strength:
- Increasing adoption and integration
- Inherent scarcity
- Macroeconomic conditions shaped government policies
Institutional demand for Bitcoin continues to grow. The Bitcoin exchange-traded funds (ETFs) have attracted substantial interest from major financial institutions. The U.S. Bitcoin ETF is the most successful launch of an ETF in history, with over $20 billion in inflows this year. This demand will increase as all institutions incorporate BTC and Bitcoin into new products, such as the monstrously large options complex.
Bitcoin’s Scarcity Creates Long-Term Value
The scarcity of Bitcoin is another critical factor, with a fixed supply of 21 million coins and a decreasing rate of new coin issuance through halving events. The halving event that occurred earlier in the year is undoubtedly partially responsible for the current upward pressure on Bitcoin’s price. Historically, halvings have been followed significant price increases with a 100+ day time lag.
Macroeconomic Trends Are Favorable for Bitcoin
Macroeconomic factors also play a significant role. Central banks worldwide have engaged in unprecedented money printing, leading to inflation. Governments, businesses, and people are all seeking assets that can serve as a hedge against currency debasement, and Bitcoin fits this role better than the gold. The Fed, the U.S. central bank, had been in a tightening cycle but recently started cutting interest rates, signaling the beginning of an easing cycle. Now that the U.S. has signaled easing, governments worldwide will trip over themselves to ease even more.
Global Economic Stimulus and De-Dollarization
Don’t you believe me? One week after the U.S. announced its cut, China unleashed its most significant injection of money into its dying economy in 4 years. They promised more to come. China won’t be the only one doing this. Another macroeconomic factor is the trend of de-dollarization. While still the dominant global reserve currency, the U.S. dollar has seen its share slowly decline—a long-term trend averaging a 0.52 percentage point drop per year since 1999.
The Weakening Dollar
Factors driving this shift include the idiotic weaponization of the dollar (e.g., as a tool for sanctions), which motivates countries to seek alternative reserves, and the rise of other currencies like China’s renminbi in international trade. The net result is that the U.S. dollar will weaken, and assets such as gold and Bitcoin will strengthen. This will only accelerate in the future.
Bitcoin’s Market Cap Can Support Massive Future Growth
These factors combine to ensure Bitcoin’s value will rise significantly. Bitcoin’s market capitalization is around $1.2 trillion and growing, making it comparable to significant corporations and some commodities. To put this into perspective, if Bitcoin’s market cap were to match that of silver (approximately $1.8 trillion), one Bitcoin could be worth around $108,020.
- Silver: $108,020
- Gold: $873,534
- USD M2: $1,085,641
- Global M2: $4,359,238
- Global equities $5,641,026
- Global bonds: $6,666,667
- Global real estate: $32,307,692
While these figures may seem extraordinary, they show Bitcoin’s realistic potential for growth. As adoption increases and the factors driving its value strengthen, Bitcoin is not just resilient—it’s laying the groundwork for unprecedented growth.