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Monday, June 27, 2022

Should You Buy Bitcoin While It’s Still Below $70,000?

The price of Bitcoin (CRYPTO:BTC) reached an all-time high of more than $68,000 per token in early November. It has since given up some of that ground, but bitcoin’s current price is still significantly higher than it was at the beginning of 2021 — when one bitcoin was going for just $32,200.

With Bitcoin’s price rising quickly, investors may be wondering whether they’ve missed out on Bitcoin’s gains or should still invest in the digital coin.

While there’s no guarantee that Bitcoin will continue rising, there are some good reasons investors should consider snatching up the cryptocurrency right now. Let’s take a quick look at what makes Bitcoin a unique investment.

Image source: Getty Images.

Bitcoin is a unique cryptocurrency

The first reason to consider investing in bitcoin is that the coin is the most established cryptocurrency available. Bitcoin was the first cryptocurrency, created back in 2009, and is the most widely accepted digital token among merchants. Using bitcoin as a form of payment isn’t exactly widespread, but some household names — including Starbucks, Microsoft, and Home Depot — allow bitcoin to be used for payment.

It may not always be practical to use bitcoin for purchases, but the coin’s growing acceptance among merchants sets it apart from many other cryptocurrencies. In addition to its increasing acceptance, bitcoin is the standard that many other cryptocurrencies are measured against. When the price of bitcoin rises or falls, other digital coins often follow its movements.

With more than 7,500 cryptocurrencies currently available, bitcoin becoming the gold standard to judge other cryptocurrencies and their prices is a good indicator that the digital coin has solidified its place in the cryptocurrency market.

And one final reason bitcoin is a unique investment option in the cryptocurrency space is that some institutional investors are beginning to warm up to this name.

Back in March, Morgan Stanley started allowing its wealth management clients access to three bitcoin funds. The move marked the first time a major U.S. bank allowed its wealthier clients to invest in bitcoin funds.

This has helped bitcoin to be taken more seriously as a separate asset class and allowed investors to diversify their portfolios in an entirely new way.

Should you buy bitcoin?

Every investor has their own risk tolerance, but potential bitcoin investors should know that cryptocurrency prices tend to be more volatile than stock prices.

For example, even though bitcoin’s price has gained more than 88 year-to-date, back in July, it experienced a massive drop that nearly wiped out all its 2021 gains at the time. So, if you’re considering buying Bitcoin — or any cryptocurrency — be ready for some potential price dips.

But if you can handle the volatility, bitcoin could end up being a good long-term investment. The cryptocurrency’s increasing adoption by individual and institutional investors, its rising popularity among merchants, and the fact that other cryptocurrency prices are essentially tied to its price are all good indicators that this unique digital coin could be poised for more growth.

 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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