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The Ultimate Cryptocurrency to Buy with $1,000 Today
Investors should keep it simple when investing money in the digital asset sector.
After the 2022 crash, the cryptocurrency market has recovered. The current industry valuation of over $2.2 trillion is a huge improvement from the $800 billion it was at the start of 2023.
It’s no surprise that Bitcoin (Bitcoin 1.10%), which is the most valuable digital asset in circulation, has benefited enormously. It has risen more than 100% in the last 12 months. But it currently stands 16% below its all-time high (as of June 25) in March.
If you have $1,000 that you are ready to invest in the cryptocurrency market, then you should seriously consider Bitcoin. Here is why.
Many catalysts
This year has featured two key catalysts for Bitcoin that have likely contributed to the price rising. In January, the Securities and Exchange Commission (SEC) approved the trading of Bitcoin spot exchange-traded funds (ETFs).. This provides a regulatory compliant method for individuals and institutions to conveniently gain exposure to this cryptocurrency.
In April, the Bitcoin network underwent what is known as a halving. This event, which occurs approximately every four years, reduces the new supply of Bitcoin coming to the market. Historically, it has been an extremely bullish development for the digital asset.
Another catalyst that could provide a favorable scenario for Bitcoin is the possibility of the Federal Reserve cutting interest rates. Perhaps Bitcoin’s price run of late is due to the market’s anticipation that this will happen sooner rather than later.
When interest rates fall, it is a stimulus measure that encourages more risk-taking by investors. The returns that can be earned on bonds, for example, will fall. And this can lead to more money flowing into riskier assets, such as stocks and Bitcoin.
Escaping the Fiat System
Bitcoin’s defining characteristics are that it is not controlled by a single entity and that its final supply is capped at 21 million coins (around 19.7 million are currently in circulation). Based on its current market capitalization of $1.2 trillion, this is certainly significant to some people.
At a high level, Bitcoin competes directly with fiat, or government-issued, currencies, as well as entire monetary and tax systems. It’s easy to see why Bitcoin is superior.
The US is operating with a worrying fiscal deficit, meaning the country’s debt burden appears to be growing ever higher. As of this writing, the US has $34.8 trillion in federal debt, a figure that doesn’t even include Social Security and Medicare liabilities.
Investors who begin to learn more about Bitcoin and its unique properties may quickly realize that owning even a small amount of it can be seen as a hedge against the problems lurking in the current financial system.
Optionality
Perhaps the ultimate long-term goal of Bitcoin is to be used as a medium of exchange. And the network could even one day support larger transactions as a method of settlement, like for banks or even governments. This would increase demand for Bitcoin.
To blockthe fintech and payments company known for Square and Cash App, is working on improving the utility of Bitcoin in various transactional contexts. As other companies begin to invest resources into creating various support services for the cryptocurrency, Bitcoin could transition from a tool used primarily for financial gain to one that forms the backbone of commerce and economic activity.
This bullish result could undoubtedly lead Bitcoin’s market value to grow even more over the next decade and beyond. However, it is very difficult to know when this will happen, or if it is even likely.
Even excluding this scenario, Bitcoin still seems like a smart investment opportunity today. A $1,000 allocation to the world’s leading digital asset, as part of an overall well-diversified portfolio, could be a smart move.
Neil Patel and its clients have no positions in any of the securities mentioned. The Motley Fool has positions and recommends Bitcoin and Block. The Motley Fool has one disclosure policy.