Despite a remarkable bull run, there's still an untapped opportunity for investors.
Bitcoin (BTC -0.42%) has pulled back from its all-time high set last month, but many investors may be hesitant to invest at the current price. After all, Bitcoin has rallied about 50% since the start of the year even after falling off its new high. That's left some people thinking they missed the opportunity to buy Bitcoin and that the potential future return doesn't justify its current price.
But there's still a big catalyst that could drive the price of the cryptocurrency much higher over the long run. While the impending Bitcoin halving could have a momentary impact on prices, this factor stands to propel Bitcoin to sustainably higher highs over a multiyear period. And there's still time to get in.
Image source: Getty Images.
The biggest reason there's still time to buy Bitcoin
Despite the long-standing and growing interest in Bitcoin and cryptocurrency from investors, the asset class has yet to reach a meaningful level of institutional adoption. Institutional investors account for the vast majority of investable assets in the world. So, if you see an increase in Bitcoin adoption from institutional investors while Bitcoin remains supply constricted, as designed, the price of Bitcoin will have to increase.
The recent introduction of 11 Bitcoin exchange-traded funds (ETFs) could be a factor that drives more institutional investors to buy Bitcoin. Although there were numerous ways for investors to gain exposure to Bitcoin and other cryptocurrency assets, the new Bitcoin ETFs give shareholders a direct stake in the funds' Bitcoin holdings. At the same time, investors don't have to deal with the technical and security hurdles involved with owning Bitcoin directly.
An analogy can be made to the introduction of gold ETFs. Although investors could gain exposure to the precious metal by investing in companies like gold miners, investing in an ETF gives the shareholder a direct stake in physical gold without having to take possession of it and ensure its security. That's why about half of institutional investors use gold ETFs for their gold allocation while just 17% use physical bullion.
If the pattern holds, the use of Bitcoin ETFs could double the potential for institutional investors to invest in Bitcoin. But to get there, investors want to see more regulation to provide a sense of security. As regulators develop more rules around cryptocurrency and investors become more comfortable holding it, there should be a big increase in institutional investor participation.
Just how big could adoption get?
As a group, institutional investors have put 4% of capital to work by investing in gold and gold-related assets. That's a high bar for Bitcoin to reach. Gold has had value, or at least the perception of value, since ancient times.
But from an investment perspective, analysts have found a combination of Bitcoin and gold to be a better risk-adjusted investment than either individual asset alone. The ratio most commonly suggested is 80% gold to 20% Bitcoin. In that case, 0.75% to 1% of world investable assets could flow into Bitcoin over time.
And while that might not sound like much, consider that there's about $250 trillion in investable assets in the world, primarily held by institutions. If 1% flows into Bitcoin, that's $2.5 trillion in increased demand. The current market cap of Bitcoin is about $1.3 trillion.In other words, there's a lot of room for the price to increase with just a small adoption among institutional investors.
Cathie Wood's Ark Invest estimates that a 1% allocation toward Bitcoin from institutional investors would push the price per coin to $120,000. A 4.8% allocation would push it to $550,000.
We're still at the very early stages of institutional adoption. But as products like the new Bitcoin ETFs make it easier to invest in the leading cryptocurrency, there should be a rapid increase in money flowing into the asset class. It's not too late to buy Bitcoin. In fact, the recent pullback may be a great opportunity for investors.
Adam Levy has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.
FAQs
Bitcoin is more stable than it's been in years, and the next halving is fast approaching. Taking current market conditions into account, now might well be the perfect time to invest, so long as you remain cognizant of the risks.
Is it too late to buy Bitcoin? ›
As a result, it's certainly not too late to buy Bitcoin. If you're looking to add it to your portfolio, however, plan to hold it for the long term.
Is crypto worth investing in 2024? ›
High potential returns: Cryptocurrency has the potential to provide returns greater than what you could see from the stock market. For example, while the S&P 500 had a return of 20.51% in the period ending February 6, 2024, Bitcoin had a return of 88.87% for the same period.
Is Bitcoin still a good investment? ›
Given these factors, the case for investing in Bitcoin remains highly relevant, especially for investors with long-term horizons. While short-term market fluctuations may cause uncertainty, Bitcoin's underlying fundamentals remain robust, making it a resilient asset for wealth preservation and long-term growth.
What will $100 of Bitcoin be worth in 2030? ›
If this pattern continues into 2030, the price could peak around 2029 or 2030, potentially aligning with Wood's price prediction. If Wood is correct and Bitcoin reaches $3.8 million, a $100 investment in Bitcoin today would be worth $5,510 in 2030. This translates to a compounded annual growth rate (CAGR) of over 95%.
How much will 1 Bitcoin be worth in 2025? ›
Bitcoin (BTC) Price Prediction 2030
| Year | Price |
|---|
| 2025 | $ 66,878.50 |
| 2026 | $ 70,222.43 |
| 2027 | $ 73,733.55 |
| 2030 | $ 85,355.80 |
1 more rowMax Keiser predicts Bitcoin to be worth $200K in 2024. Fidelity predicts one Bitcoin will be worth $1B in 2038. Hal Finney predicted $22M per Bitcoin by 2045.
Will Bitcoin be worth more in 10 years? ›
However, some experts have offered bold projections. Cathie Wood, the founder, chief executive officer, and chief investment officer of ARK Invest, believes that Bitcoin could be worth $1 million per coin before 2030, as adoption by institutional investors increases.
How much is Bitcoin expected to grow in 2024? ›
Bitcoin (BTC) Price Prediction 2024-2040
Our most recent Bitcoin price forecast indicates that its value will increase by 14.21% and reach $74,156 by June 20, 2024.
Which coin has 1000x potential? ›
Rollblock (RBLK) is becoming one of the most prominent altcoins. Thanks to its long-term growth potential, this stage 1 presale star has the potential to compete with huge coins such as Solana (SOL), Avalanche (AVAX) and Binance Coin (BNB). In fact, certain analysts peg this rookie as the next 1000x altcoin in 2024.
Most people don't own any. There are (right as this moment) just under 19,000,000 BTC in existence. There are around 330,000,000 USA citizens and around 7,500,000,000 people in the world. That works out to less than 0.06 bitcoin per person in the USA and about 0.0025 bitcoin per human.
Which crypto can give 1000x in 2024? ›
Being a project that stands out for several reasons, EarthMeta could potentially be the next 1000x in crypto space. Since the project integrates AI with the Metaverse, creating a decentralized digital world, it allows users to own, govern, and interact with virtual cities and assets, providing a unique experience.
Should I buy Bitcoin now or wait? ›
Only buy Bitcoin if you feel confident about its long-term prospects as an entirely new asset class that belongs in your portfolio for both upside and diversification purposes. Right now, there is simply no other cryptocurrency that I'm as confident about buying and holding for the long term.
How much to invest in Bitcoin to become a millionaire? ›
While this is a lower-bound scenario, we can use it as a baseline to show what it takes for investors to become Bitcoin millionaires. Assuming an annualized return of 30%, one would need to invest roughly $85,500 annually for five years to hit millionaire status. Over 10 years, this number falls to around $18,250.
Who owns the most Bitcoin? ›
Satoshi Nakamoto, the pseudonymous creator of Bitcoin, is believed to own the most bitcoins, with estimates suggesting over 1 million BTC mined in the early days of the network.
Will Bitcoin go back up? ›
Markets began to recover somewhat in 2023, and early 2024 showed optimism, with expectations for Bitcoin price to surpass $100,000 following the fourth halving at block height 840,000.
How much longer will Bitcoin last? ›
Bitcoin's pseudonymous creator, Satoshi Nakamoto, set a hard cap of 21 million bitcoins for mining. With each halving, the rate at which new bitcoins are created slows down, and the final bitcoin is expected to be mined around the year 2140.
Should you buy Bitcoin before halving? ›
Consider this: if it were universally anticipated that bitcoin's value would surge immediately following the 2024 halving, investors would likely move to acquire bitcoin before the event, driving up its price in the present rather than in the future.
