Bitcoin has captivated many investors due to its incredible long-term returns, but its volatility has kept some investors on the sidelines. The leading cryptocurrency regularly sees sharp fluctuations that can push it up or down by 10% in a matter of days.
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Not every investor wants to deal with that level of uncertainty, but you can’t question the results if you compare it to popular benchmarks like the S&P 500 and Nasdaq Composite. The cryptocurrency also recently reclaimed $100,000 per coin and may head higher.
If you are on the fence with Bitcoin, these are some of the reasons to consider getting started.
Although Bitcoin doesn’t produce revenue and net income growth like publicly-traded corporations, the returns are unquestionable. Bitcoin has risen by 68% over the past year and has soared by 978% over the past five years.
The S&P 500 and Nasdaq Composite haven’t even doubled over the past five years. Bitcoin has proven to be a viable way to multiply your money. While results are not guaranteed, many investors use long-term returns to assess momentum and investors’ appetite for an asset. Bitcoin has hit the mark for a long time despite the narrative around uncertainty.
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Last year was a big one for Bitcoin. Spot Bitcoin ETFs began trading on Jan. 11, 2024, and many financial institutions rushed to offer their own. BlackRock, Fidelity, ARK Invest, VanEck, and Grayscale are some of the firms that launched Bitcoin ETFs.
Each of those ETFs puts more money into Bitcoin, and that leads to upward pressure on the price. Bitcoin ETFs have made the digital currency more accessible for everyday investors, and this trend can catapult Bitcoin higher in the long run.
President Donald Trump established the Bitcoin Strategic Reserve with an executive order. This strategic reserve can boost the demand for crypto and lead to more gains for investors.
While the Bitcoin Strategy Reserve is relatively old news, it can ripple into individual states. For instance, Arizona recently became the second U.S. state to create a Bitcoin Strategic Reserve. It’s possible for more states to follow the trend, and each commitment requires more Bitcoin purchases.
Bitcoin also serves as a valuable inflation hedge that gives it more value as central banks print more money. There are only 21 million Bitcoins available, and it is impossible for anyone to increase the supply. That’s the beauty of Bitcoin’s decentralized blockchain.
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