Last year was an incredible moment for Bitcoin (BTC) enthusiasts, with the cryptocurrency experiencing a price surge that more than doubled in 2024. This pattern aligns with Bitcoin’s typical behavior—adventurous ups and downs, generally trending upward.
As we closed the year, Bitcoin traded around $92,000, resting 15% below its all-time high. So, is this the right time to buy Bitcoin while it’s still below the $100,000 mark?
A Pause in the Action
Bitcoin enjoyed a post-election rally as investors became increasingly optimistic about future regulatory support for crypto. Recently, however, Bitcoin seems to be taking a moment to catch its breath. This could be perceived as a chance to buy the dip.
Price drops are nothing new for Bitcoin. In fact, they are part and parcel of the experience. Those who have held onto their Bitcoin for the long haul—a group affectionately referred to as hodlers—understand that enduring these wild swings is essential. Throughout its 16-year journey, Bitcoin has seen its value drop by over 50% multiple times, alongside numerous declines of more than a third. Each time, naysayers published obituaries for Bitcoin, citing its links to illicit activities or claiming it held no real utility or worth. Yet, history shows us these pessimistic predictions have consistently missed the mark, as Bitcoin bounced back to set new highs.
The Case for Scarcity
Supporters of Bitcoin often liken it to gold, a traditional store of value. On the surface, this comparison holds merit. Gold is a finite resource, and although more is mined each year, it exists in limited quantities on our planet. While it does have some practical applications, gold’s primary role is as a symbol of wealth and investment. Its value largely stems from collective agreement on its worth rather than inherent utility.
In a similar vein, Bitcoin’s value hinges on the consensus that it is valuable. However, Bitcoin’s scarcity outstrips that of gold. The rate at which new Bitcoin enters the market is predetermined and cannot adapt to rising demand. There will only ever be 21 million coins, with nearly 19.8 million already mined.
Contrary to Bitcoin, as gold prices surge, mining becomes economically feasible in more challenging locations, which could lead to an increase in gold supply. Concepts are even emerging around potentially mining gold in outer space, where substantial deposits may lie in asteroids.
When it comes to transportation and divisibility, Bitcoin shines brighter than gold. As our economic activities increasingly transition to digital platforms, it’s plausible that Bitcoin will establish itself as a valuable asset for many global citizens.
Massive Growth Potential
Since Bitcoin doesn’t generate revenue, earnings, or cash flow, placing a conventional price target on it proves challenging. However, we can return to the gold comparison to assist our assessment.
The current market value of all gold above ground sits at approximately $17.7 trillion. Given Bitcoin’s advantages compared to gold, a rise of over nine times to match gold’s market cap could be a reasonable projection. In that case, Bitcoin’s potential value could soar to around $900,000 based on its existing supply.
Buying this digital asset now, while it’s still below $100,000, could be a savvy investment move.
