Finance

Some Wall Street pros say a no-brainer cryptocurrency should be bought before it surges 685% or higher


Cryptocurrency Market Rise Around 110% in 2023, Pushing Cryptocurrency Prices Higher Bitcoin (Cryptocurrency: BTC) The increase this year is more than 150%. But some financial professionals believe that Bitcoin holders will have huge upside ahead, thanks to the potential approval of a spot Bitcoin exchange-traded fund (ETF) in 2024.

Read on to learn more.

Bitcoin has a simple investment thesis behind it

Bitcoin is the most popular and valuable cryptocurrency. In fact, Bitcoin, with a market capitalization of approximately $845 billion, accounts for 50% of the cryptocurrency market. One of the reasons for its popularity is its status as a pioneer.

The modern cryptocurrency market was born on January 3, 2009, the day the first Bitcoin was mined from the blockchain. Simply put, Bitcoin has been around longer than its peers and therefore has a wider following.

Another reason for its popularity is its simple investing thesis. Bitcoin is a finite asset because its source code limits the supply to 21 million coins. Bitcoin is similar to gold in this regard. Just as gold derives much of its value from scarcity, so does Bitcoin.

On this basis, basic economics holds that when supply remains constant, the price of an asset will rise in response to demand. In other words, whether the value of Bitcoin will become higher or lower in the future depends entirely on demand. Investors have good reason to believe demand will rise as demand increases. This will increase in the coming years.

Spot Bitcoin ETF could drive Bitcoin demand

One catalyst that could boost demand for Bitcoin is the pending approval of multiple spot Bitcoin ETFs. This is especially true for applications from the following institutions. black stone Fidelity and Fidelity, two of the largest asset management companies in the world. A spot Bitcoin ETF will invest in (and track the price of) Bitcoin, providing investors with direct exposure to the cryptocurrency.

Products like this could bring massive amounts of money to Bitcoin by removing the complexity of creating, funding, and accounts on cryptocurrency platforms. Through spot Bitcoin managed ETFs, investors can effectively add Bitcoin to their existing brokerage accounts.

The U.S. Securities and Exchange Commission (SEC) has rejected such proposals in past years. But a federal appeals court recently reportedly dismissed the agency’s reasoning as untenable, raising expectations that some spot Bitcoin ETFs will be approved in early 2024. Wall Street Journal.

Anthony Scaramucci, founder of SkyBridge Capital, believes that the BlackRock ETF alone can attract US$100 billion in institutional investment into Bitcoin. Scaramucci said such an influx of money could push the price of Bitcoin to $330,000. This represents a 685% increase from current prices.

Even more bullish is micro strategy Former CEO Michael Saylor. He sees two important catalysts in 2024. First, the approval of a spot Bitcoin ETF may attract more funds from retail and institutional investors. Second, the next Bitcoin halving – a hard-coded process that cuts mining rewards in half every four years, limiting the supply to 21 million coins – will reduce selling pressure as miners will have fewer Bitcoins to sell. The next halving event will occur in April 2024.

In 2022, Thaler predicted that Bitcoin would reach $500,000 within the next decade. But he recently told CNBC, “If Bitcoin doesn’t go to zero, then it’s going to hit $1 million.” This updated prediction implies a 2,280% upside from current prices.

The most promising among them may be Ark Invest.The asset management firm, run by Cathie Wood, released a valuation model in 2023 that assumed a price per Bitcoin of $1.48 million by 2030which represents an increase of more than 3,400% from current prices.

Bitcoin is worth buying at its current price

Huge price targets are exciting, but readers should remember that no one knows the future. Cryptocurrency markets are both volatile and rife with regulatory uncertainty. Approval of a spot Bitcoin ETF is by no means a sure thing, and Bitcoin bulls could be wrong about the impact of such a product.

That said, risk-tolerant investors should carve out a place for Bitcoin in their portfolios, and now is a good time to buy a small position. I would start with a 2% position and gradually increase it over time. I’ll probably stop adding 5% to my portfolio when Bitcoin takes over the total share.

Alternatively, risk-averse investors should avoid cryptocurrencies altogether. There are many other investment options.

Should you invest $1,000 in Bitcoin right now?

Before buying Bitcoin stocks, consider the following factors:

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Trevor Janewin There are no positions for the above stocks. The Motley Fool holds and recommends Bitcoin. Motley Fool has disclosure policy.

Some Wall Street pros say a no-brainer cryptocurrency should be bought before it surges 685% or higher Originally published by The Motley Fool



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