Is Bitcoin a Good Investment in 2024?

Is Bitcoin a Good Investment in 2024?

Gianluca Lombardi September 27, 2023
12 min read

Bitcoin is a digital asset that has captured the interest and attention of investors, financial institutions, governments, and the general public. Since its creation in 2009, bitcoin has experienced significant price volatility, fuelling debate around its value as an investment asset. This article provides an in-depth look at BTC to determine if it makes sense to invest in this controversial cryptocurrency.
Before investing in any asset, it is crucial to understand what you’re putting your money into. This article examines if Bitcoin is a smart investment choice by weighing its pros and cons and comparing it to other investment vehicles. Our goal is to provide an unbiased, research-based analysis to help readers make informed decisions about Bitcoin investing.

Related: Which is the best crypto to buy right now?

Key Takeaways:

  • Volatility Concerns: Bitcoin has shown significant returns, but it remains highly volatile and risky investment for some investors.
  • Expert Opinions: Opinions are divided among experts, with crypto advocates seeing massive potential, while traditional finance experts caution against its unpredictability.
  • Macroeconomic Factors: 2023 has seen macroeconomic upheavals that have impacted the price, potentially offering a good entry point for new investors.
  • Diversification Strategy: digital currencies can be a part of a diversified investment portfolio but should not be the sole focus due to its volatile nature.
  • Long-term Potential: Despite immediate challenges, the long-term outlook for Bitcoin and other cryptocurrencies remains optimistic for some investors, underpinned by blockchain technology and increasing mainstream adoption.

Pros and cons to invest in Bitcoin

Bitcoin pros

  • Growth potential – Bitcoin has historically delivered the highest returns compared to any major investment asset class over the past decade. Investors who got in early and held have achieved extraordinary returns.
  • Diversification – Crypto market acts independently of the stock market and economy. This makes it an effective portfolio diversifier to hedge against inflation or economic downturns.
  • Ownership and Control – Bitcoin operates without central authority. Users fully control their funds. Transactions are secure and censorship-resistant. This appeals to investors who wish to hold their own assets.
  • Liquidity – As the most actively traded cryptocurrency, crypto offers high liquidity to traders and investors. Converting BTC to cash is relatively fast and easy.
  • Accessibility – Anyone can buy Bitcoin on a crypto exchange worldwide. No minimums or restrictions. Easy access promotes high participation and liquidity. BTC is borderless and available globally 24/7.
  • Security – The blockchain uses advanced cryptography and decentralized processing making it very resistant to attack or manipulation.
  • Portability – Bitcoin wallets can send and receive coins anywhere without restrictions making BTC highly portable.

Bitcoin cons

  • Extreme volatility – As an emerging asset, the price of bitcoin swing wildly in value frequently. This makes it difficult to predict reasonable prices.
  • Vulnerable exchanges – Many bitcoin exchanges have been hacked with billions in coins stolen. Users must take security precautions.
  • Competing cryptocurrencies – Over 30,000 other crypto coins like ether compete for market share. It is unclear if BTC will dominate long-term.
  • Uncertain regulations – Governments are still exploring cryptocurrency regulations. Future policies could restrict growth.
  • Complex technology – The underlying blockchain technology can be complex and hard to use hindering mainstream adoption.

Historical Performance of Bitcoin

Since its creation, Bitcoin’s price has seen astronomical growth with some dramatic ups and downs. Here is a brief overview of Bitcoin’s price history and major milestones:

Major Milestones

  • 2009 – Bitcoin is created and first transaction occurs. Price starts at $0.
  • 2010 – Early adoption and trading begins at $0.0008.
  • 2011 – Reaches $1 then spikes to $31 before falling back to $2.
  • 2013 – Price surges from $13 to over $1,000 driven by wider adoption.
  • 2017 – Massive hype leads to all-time high of nearly $20,000 before crashing.
  • 2020 – 2021 – Institutional investment helps push BTC to $69,000.
  • 2022 – 2023 – macroeconomic cataclysms have led to price drop to $16,000.

Volatility Factor

As an emerging asset class, BTC is known for its dramatic price swings. Volatility is decreasing over time but remains high compared to stocks and commodities. The extreme ups and downs amplify the risk and potential reward of investing in Bitcoin.

How and Where to Buy Bitcoin and Invest in Crypto?

For those interested to invest in cryptocurrency like BTC, the first step is acquiring some coins. There are several options to do this:

  • Cryptocurrency exchange – These online platforms allow trading fiat currencies like USD for BTC. Exchanges include eToro, Bybit, Bitget and BingX.
  • Bitcoin ATMs – These physical kiosks allow quick purchases of BTC by accepting cash, debit or credit cards.
  • Mining – By providing computing power to process transactions, miners earn new bitcoin. However, this now requires specialized hardware and access to cheap electricity.

bitcoin safe

For full control over securing your Bitcoin investment, using a hardware wallet like Trezor or Ledger with a cryptocurrency exchange like Bybit or BingX is recommended. With this approach, you withdraw your BTC from the crypto exchange to your own private hardware wallet for offline storage. This prevents hacks or loss of funds if the exchange is compromised. However, the responsibility falls on you to safeguard your investment.

For a more hands-off approach, eToro is a highly regulated, publicly-traded platform where you can invest in crypto without taking custody yourself. eToro insures the funds and handles the security on your behalf. This makes it simpler for beginners who don’t want the hassle of wallets and bitcoin transactions.

The right option depends on your priorities, technical capabilities, and risk tolerance. Hardware wallets give you full ownership yet require diligently managing keys and security. eToro offers effortless investing but you must trust them to keep your investment protected. Evaluate your needs to determine which approach best suits your investment strategy.

Curious to know more about eToro? Read our comprehensive eToro Review for a deep dive into its features, pros, and cons.

Ready to start investing? Visit eToro’s website to get started.

Comparing Bitcoin to Traditional Assets

How does Bitcoin stack up to other investment asset classes in terms of risks and rewards?

Bitcoin vs Stocks

The key advantage Bitcoin (BTC) has over stocks is its potential for explosive growth in a short timeframe. Bitcoin’s returns have vastly exceeded even the best-performing stocks over the past decade. The S&P 500, on the other hand, delivers more modest but consistent returns, averaging 7-10% annually over the long term.

However, if you’re seeking a less volatile investment option, the stock market is worth considering. Stocks face smaller price swings and a lower risk of catastrophic losses. Moreover, when you invest in stocks, you benefit from legal protections and ownership rights that BTC doesn’t offer. Overall, stocks offer a balanced, moderate upside with lower short-term risk.

Interested in trading stocks? Learn more about your options and strategies on our Trading Stocks page.

Bitcoin vs Real Estate

A key benefit real estate offers over Bitcoin is reliable cash flow from rental income. This provides a cushion against price volatility. Real estate also faces less risk of permanent loss since land/property has inherent value.
BTC lacks dividends or cash flow. Its only source of returns is speculative – hoping to sell at ever higher prices. However, investing in crypto assets requires lower startup capital and is easier to liquidate compared to selling property. It offers global exposure without geographic restrictions.

Bitcoin vs Gold

The fixed BTC supply of 21 million makes it more scarce than gold, which can continue to be mined. This scarcity potentially gives BTC an edge when it comes to storing value over the long term.

However, gold has a multi-millennial track record as a stable store of value that Bitcoin simply can’t match. While gold is not easily confiscated or susceptible to hacking like Bitcoin, it does come with higher costs for secure storage and transportation. On the flip side, Bitcoin offers the advantage of digital portability.

Curious about how Bitcoin stacks up against gold in more detail? Check out our comprehensive Bitcoin vs Gold comparison.

Future Predictions for the Bitcoin Price

Every 4 years, the mining rewards are cut in half per its code in an event called the “bitcoin halving”. With fewer new coins entering circulation, halvings tend to constrain supply while demand continues increasing. Historically, Bitcoin’s price has risen significantly in the 12-18 months after halvings. The next halving is expected in April 2024, which could fuel another potential bull run.
Additionally, asset management giants like BlackRock have applied to launch Bitcoin ETFs (exchange-traded funds) which are still awaiting SEC approval. ETFs give mainstream investors easy exposure to BTC through normal brokerage accounts. Experts anticipate SEC-approved Bitcoin ETFs could rapidly expand ownership and pump billions of institutional dollars into Bitcoin – acting as a major upside catalyst.
I expect both the 2024 halving and eventual ETF approvals to be tremendously positive for Bitcoin’s price based on increasing scarcity and accessibility. Of course, past performance is no guarantee of future results, but these developments underscore Bitcoin’s long-term investment potential.
Given its past price fluctuations, what does the future hold for the price of BTC? Here are a range of predictions from experts:

  • Conservative view: BTC reaches $30,000 – $50,000 per coin, helped by ongoing adoption and its limited supply.
  • Moderate view: BTC reaches $100,000 – $500,000 per coin, assuming it becomes a standard investment asset class and store of value.
  • Aggressive view: BTC becomes a global reserve currency and reaches $1 million per coin, replacing gold and fiat currencies.

As with any speculative asset, it’s important to approach these price predictions with caution. Crypto assets’ future value could range from being worth a fortune to fading away to nothing, depending on how technology and market conditions evolve.

Want to know more about where the price of Bitcoin could be heading? Don’t miss our in-depth Bitcoin Price Prediction page.

Should you invest in cryptocurrency in 2023?

With its high risk and return potential, where do bitcoin and crypto fit within an investment portfolio? Here are some ideas for investment strategy from experts:

  • “1% exposure can provide upside while limiting risk” – Typical asset allocation recommendation for BTC by traditional investment advisors.
  • “5% can enhance returns substantially” – More aggressive allocation recognizing bitcoin’s stellar past returns.
  • “10% allocation as digital gold” – View of bitcoin as an alternative store of value like gold warrants higher exposure.
  • “20%+ as a hedge against fiat currency debasement” – BTC bulls see it protecting against inflation better than cash or bonds.

How much to allocate depends on your personal goals and tolerance to volatility. A small to moderate portion allows benefiting from the growth potential while minimizing the risks.

Is Bitcoin a Good Long-term Investment?

There are reasonable arguments on both sides of this debate:
The case for bitcoin:

  • It has disruptive blockchain technology that could transform digital payments and finance.
  • As a decentralized currency, it offers an alternative to government-controlled fiat money.
  • It has a transparent immutable ledger and a limited supply giving it intrinsic value like gold.
  • Mainstream adoption is steadily growing raising its utility and value.

The case against bitcoin:

  • Extreme volatility with boom and bust cycles makes it risky for conservative investors.
  • As a new asset, long-term price patterns and behavior is still unpredictable.
  • High energy costs for mining and competing cryptocurrencies raise sustainability questions.
  • Governments lack regulatory frameworks for cryptocurrency use in finance.

Given these arguments on both sides, bitcoin is probably best suited for more aggressive investors who can withstand volatility until its long-term value becomes clearer. More conservative investors may prefer to wait and see.

What Experts Say About Cryptocurrencies Like Bitcoin

Investing in Bitcoin has sparked diverse opinions from various sectors, particularly from those within the cryptocurrency industry and from experts in traditional finance. To provide you with a balanced and insightful viewpoint, we’ve conducted thorough research and handpicked statements from high-authority experts in both fields.
These opinions aim to shed light on the question: Is Bitcoin a good investment?

Opinions from Traditional Finance Experts

While Bitcoin might be a groundbreaking asset, it’s essential to understand how it fits into the broader world of finance. For this reason, we’ve also included opinions from leading experts in traditional finance. These are individuals who have years of experience and deep understanding of investment vehicles like stocks, bonds, and commodities. Their viewpoints offer a different lens through which to evaluate the investment-worthiness of Bitcoin.

Warren Buffet on Bitcoin investing

I’m not a fan of Bitcoin. I am a fan of blockchain technology… Cryptocurrencies have no underlying value which makes them hard for me to analyze or put a fair value on.” – Warren Buffett, billionaire investor.

“Bitcoin is an alternative store of value and inflation hedge to traditional safe haven assets.” Dr. Ruth Porat, CFO Alphabet and Google.

“Crypto is a solution in search of a problem. It’s not an asset class, not a security. It’s manipulated by whales, issuers and exchanges.” Tidjane Thiam, Credit Suisse CEO.

Ray Dalio emracing bitcoin

“Bitcoin has proven to be a hedge against inflation over time. While volatile, it should be considered for portions of portfolios.” Ray Dalio, founder Bridgewater Associates hedge fund.

“I don’t think crypto as a digital gold will stick…The more likely scenario is crypto as digital cash.” Niall Ferguson, historian and author .

The quotes showcase the full range of opinions from investing experts – some see potential value and inflation hedging in Bitcoin, while others remain skeptical of its utility and classification as a true investment asset class. The merits of cryptocurrencies continue to be debated among financial leaders.

Opinions from Crypto Industry Experts

When it comes to understanding the value and potential of Bitcoin, who better to turn to than experts in the cryptocurrency field itself? We’ve carefully selected quotes from renowned figures who have in-depth knowledge and expertise in cryptocurrency, blockchain technology, and decentralized finance. Their opinions can provide invaluable insights into the long-term viability and investment potential of Bitcoin.

Tim Draper on bitcoin investing

I’m a big believer in bitcoin. It will go into the $100,000 to $250,000 range within the next 5 years” – Tim Draper, venture capitalist and Bitcoin investor.

Bitcoin may be the best inflation hedge out there after gold. I’m very bullish on bitcoin and maxis are going to be right on this one.” – Mike Novogratz, CEO Galaxy Digital Holdings

Bitcoin was designed to be digital gold – a store of value and inflation hedge. I expect it capturing at least 5% market share of the gold market cap.” – Anthony Pompliano, Morgan Creek Digital.

Bitcoin is showing all the characteristics of being a great store of value and alternative financial system. Fixed supply and increasing demand will propel it higher.” – Michael Saylor, CEO MicroStrategy.

These industry experts clearly lean positive overall on BTC’s investment prospects and its potential to serve as an inflation hedge or “digital gold” based on its technical design and limited supply. But there are still notes of caution that it remains experimental and faces ongoing challenges to reaching mass adoption.

Conclusion – is Cryptocurrency a Good Investment?

Bitcoin and Ethereum remain polarized assets among both investors and financial experts. While the crypto upside potential is high, the risks should not be ignored. Bitcoin investors need strong nerves and high risk tolerance. However, used prudently as part of a diversified portfolio, many believe Bitcoin still offers attractive upside compared to other assets. As with any investment, doing thorough research before buying is key.
Hopefully this outline presented an objective and balanced analysis of both sides to help you make informed decisions about whether BTC does indeed make sense for your individual investment goals and risk profile.

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Is Bitcoin a Good Investment? – Frequently Asked Questions

Is it too late to invest in Bitcoin?

While Bitcoin has seen tremendous growth, many believe there is still opportunity. Bitcoin is still relatively new and adoption remains low globally. As more institutional and retail investors allocate funds to Bitcoin, demand could continue rising higher.

Could Bitcoin go to zero?

Bitcoin collapsing completely is unlikely but not impossible. Bitcoin’s decentralized structure protects it from external threats. The bigger risk is another cryptocurrency superseding it. However, BTC retains an enormous lead over competitors currently.

Is Bitcoin too volatile for most investors?

Absolutely, Bitcoin’s volatility exceeds most assets and is not for the faint of heart. It remains speculative and risky. But for investors with high risk tolerance, BTC offers asymmetric upside that may warrant the volatility.

Can governments ban or shut down Bitcoin?

In theory a coordinated global ban could undermine Bitcoin. But Bitcoin’s decentralized peer-to-peer structure makes it resistant to censorship or bans by design. A ban would likely require shutting down the internet itself.

How does Bitcoin compare to other cryptocurrencies?

As the first mover, BTC remains the most adopted, proven and valuable cryptocurrency, dominating market share. However, thousands of competitors like Ethereum show promise and attempt to improve on BTC’s limitations.

Is Bitcoin primarily used by criminals or for money laundering?

This perception is overblown. Most activity is speculative investment or legitimate commerce. Payment transparency makes Bitcoin a poor choice for illicit usage compared to untraceable cash.

Is Bitcoin mining environmentally sustainable?

Bitcoin mining requires substantial electricity which fuels carbon emissions. It remains controversial, though institutional miners increasingly use renewable energy. New protocols aim to cut future energy usage substantially.

Gianluca Lombardi

Gianluca is the editor-in-chief of this site. A finance graduate, he is an active trader who has tested all trading platforms and knows all their secrets. Technology is his passion; he spends much of his free time in the metaverse. Gianluca loves learning new things, researching, discussing and writing about technology, especially when it comes to cryptocurrency and blockchain technology.