It May Be a Wild Ride, But This Cryptocurrency Could Generate Serious Wealth. Here’s Why – 247CryptoReporter


Cryptocurrencies have become very popular with younger investors. But not all cryptos are alike.

Cryptocurrency has become a mainstay investment for younger investors. According to research by The Motley Fool, roughly 70% of millennials and more than half of Gen Z investors surveyed are at least somewhat likely to own cryptocurrencies. About 75% of crypto buyers view it as an investment, not some quick-money gamble.

However, cryptocurrencies have proven very volatile, which can test even the most unflappable investors.

There are many cryptos, but Bitcoin (BTC 1.18%) remains a top option for long-term investors.

Here’s why Bitcoin could make you a ton of money over the long haul.

It’s already done it

Cryptocurrencies are a little different from stocks. Stocks represent businesses with intrinsic value, so stock prices are influenced over time by how the underlying business performs. Cryptocurrencies depend solely on supply and demand because they don’t represent anything. Many cryptos serve a purpose that can create demand, but their prices ultimately depend on how much someone is willing to pay for them.

That makes Bitcoin’s long-term performance meaningful. In 2021, there was a bubble due to zero-percent interest rates that artificially increased demand for almost every speculative asset. Most cryptocurrencies haven’t revisited those 2021 highs since the bubble popped in 2022, but Bitcoin has.

Bitcoin Price Chart

Bitcoin Price data by YCharts.

What does this mean? Demand for Bitcoin has grown over time, supporting higher prices. Bitcoin has outperformed the stock market as an investment over the past five and 10 years. A $1,000 investment made a decade ago is worth $118,000 today. Although nobody should assume those returns will continue, Bitcoin’s long-term performance underlines its strong demand, a contrast to most cryptocurrencies.

Can it keep going?

Bitcoin is an anti-inflationary asset. Miners constantly create new bitcoins, but the pace slows as the supply grows. The ultimate maximum supply is 21 million coins (about 19.8 million now circulate). Limiting the supply supports higher prices as demand for Bitcoin grows.

If demand for Bitcoin rises faster than the supply, Bitcoin’s price should go up.

But that’s not all. Bitcoin’s price is in U.S. dollars, the supply of which is constantly growing. Inflation weakens the dollar, which, all else being equal, can boost Bitcoin’s price. These two factors could push Bitcoin’s price higher over time, though investors fiercely debate Bitcoin’s long-term price target. Ark Invest’s Cathie Wood, for example, has a $3.8 million price target for 2030, though that’s clearly an outlier.

Ultimately, nobody knows Bitcoin’s future price, so it’s best to concentrate on what might drive demand higher. The price will likely follow along.

Should investors buy Bitcoin today?

If there’s one thing you can count on, it’s volatility. You can see below that Bitcoin routinely drops 10%, often falls 30%, and can decline over 60% from its high at times.

Bitcoin Price Chart

Bitcoin Price data by YCharts.

Remember, Bitcoin doesn’t represent any underlying asset or business, so there are no guardrails per se when wary investors start selling, or greedy investors won’t stop bidding prices up.

Thus, the best investment strategy for Bitcoin is to buy slowly and often, a technique known as dollar-cost averaging. Regularly buying Bitcoin can help you build an investment at various price points, resulting in a blended average in the middle. You won’t buy at the top or the bottom, but you should have plenty of room for investment returns if Bitcoin continues performing anything like it has in the past.

Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.


#Wild #Ride #Cryptocurrency #Generate #Wealth #Heres

Want to see more news about Cryptocurrency?

Johnny Walker

I love posting news feeds!

Related Posts

This state suffered the most crypto losses in 2023 – 247CryptoReporter

In 2023, the Federal Bureau of Investigation (FBI) received nearly 70,000 complaints of cryptocurrency crime and reported a loss of almost $6 billion. @Bitcoin_News_Daily #state #suffered #crypto #losses Want to…

Documentary suggests Bitcoin creator Satoshi Nakamoto is developer Peter Todd – 247CryptoReporter

Who exactly Satoshi Nakamoto is — a person or a group — has been subject of much speculation since Bitcoin’s launch in January 2009. A new HBO documentary about the…

Leave a Reply

Your email address will not be published. Required fields are marked *

You Missed

This state suffered the most crypto losses in 2023 – 247CryptoReporter

This state suffered the most crypto losses in 2023 – 247CryptoReporter

Ethereum News : ETH could decline to $2,200 amid rising US inflation and exchange reserves

Ethereum News : ETH could decline to $2,200 amid rising US inflation and exchange reserves

NFT sales surge to nearly $83 million, signaling a potential market rebound NFT Cryptocurrency

NFT sales surge to nearly $83 million, signaling a potential market rebound NFT Cryptocurrency

Dogecoin News – Turn $100 into $100,000 Fast with These Altcoins!

Dogecoin News – Turn $100 into $100,000 Fast with These Altcoins!

Documentary suggests Bitcoin creator Satoshi Nakamoto is developer Peter Todd – 247CryptoReporter

Documentary suggests Bitcoin creator Satoshi Nakamoto is developer Peter Todd – 247CryptoReporter

Ethereum News : Ether ETFs See Zero Inflows, Ethereum Foundation Continues Selling ETH

Ethereum News : Ether ETFs See Zero Inflows, Ethereum Foundation Continues Selling ETH
Please enter CoinGecko Free Api Key to get this plugin works.