And 6 Reasons Why You Shouldn’t Own ANY Bitcoin
Yeah, that’s right. There are pros and cons to owning the King of Cryptos.
And because everyone’s investment risk profile is different, there is no “one size fits all” guaranteed investment philosophy for investing in Bitcoin. These are MY opinions – shared by plenty on both sides of the turf – but you’ll have to make up your own mind as to which make more sense for you.
It doesn’t matter where you are on your investment timeline.
Just beginning to accumulate or earnestly working to preserve, reallocate and grow what you already have as you enjoy your golden years, first up – here are six key reasons why Bitcoin is poised, once again, to exceed market expectations in the coming months and why YOU should own some.
Reason #1: Price Elasticity/Market Resilience
Put aside everything you think you know about cryptocurrency. What if I told you there was an asset that defied all expectations and has thrived amidst market chaos?
When markets sink and panicked investors scramble for a life preserver, Bitcoin has often emerged as a lifeline of safety.
Skeptical?
During the 2018 bear market, while the S&P 500 fell by 6%, Bitcoin’s price increased by 80%.
When COVID-19 hit and the market tanked in March 2020, although Bitcoin dropped alongside traditional markets it bounced back much faster. By the end of 2020, Bitcoin had surged over 300%, outperforming ALL other asset classes.
Now, I know what you’re thinking – 2022.
Bitcoin tanked along with the S&P 500 at the end of 2021 going down from an all-time high of $69,420 to a bottom in November of 2022 of $15,599 – a 78.82% drop – while the S&P lost only 19.44% in 2022.
That’s a huge difference! Imagine losing more than 3/4 of your nest egg!
Who wouldn’t panic?
Not to mention that the S&P recovered quickly and to-date (May 1st 2024) is back up by over 30%.
Bitcoin? Went from that $15.6K bottom to a new all-time high of $73,650 in March of 2024 and has now settled back down to just over $59,000 today – a 280% GAIN – almost 10X what the S&P did in the same timeframe.
Yep. Fortune favors the brave.
This undeniable resilience is due in part to Bitcoin’s decentralized ecosystem. It’s not tied to any particular economy or government, making it less susceptible to geopolitical events or monetary policy decisions that make traditional markets tremble and fall.
Volatile? Compared to the S&P? Heck yeah.
Yet, Bitcoin’s consistent recovery after market downturns is just the beginning of its story. As impressive as Bitcoin’s past performance has been, there’s an even more powerful change agent that could send Bitcoin’s price into rarified air once more: the ‘Halving’.
Reason #2: The Halving and Its Impact on Value
Imagine a built-in mechanism that periodically slashes the supply of a finite commodity, creating a shock of scarcity that ripples through the market.
And the timing of that shock wave is known well in advance.
That’s the power of each Bitcoin halving. Each halving cuts the reward that is handed to Bitcoin miners who solve the algorithmic riddle by half, thereby stemming inflation.
Bitcoin’s halving dates, which occur roughly every four years, have consistently been followed by hockey stick, God candle bull markets. The latest halving happened this past April 19th.
Take a look at halvings in the past and how Bitcoin’s price reacted:
- First halving (November 2012): Bitcoin’s price increased from $12 to $1,184 in twelve months, a gain of 9,587%
- Second halving (July 2016): Bitcoin increased from $651 to $19,326 within 18 months, a gain of 2,971%
- Third halving (May 2020): BTC increased from $8,821 to $64,800 within a year, and to $69,420 just a few months later, a gain of 787%.
- Fourth halving (April 2024) Bitcoin’s price on this most recent halving day was $63,844. Obviously, history suggests we could see Bitcoin’s price jump again.
Some analysts, like Plan B, who created the now well-known Bitcoin Stock-to-Flow model, predict Bitcoin could reach close to $300,000 or more by 2025, just shy of 5X the price on halving day.
Which makes perfect sense considering the diminishing returns that each cycle has shown as it matures.
However, further on, seven-figure price targets are also emerging. One of the most well-known is from Ark Invest’s CEO, Cathie Wood, who now sees a Bitcoin price of $1 million as too conservative by 2030.
But the halving isn’t the only factor driving Bitcoin’s growth. There’s a tidal wave of institutional money flowing into the market, and it has the potential to change the game entirely.
Reason #3: Increasing Institutional Adoption
From Wall Street to Main Street, the big dogs have finally awakened to Bitcoin’s potential. And following right behind are the “Average Joe” retail investors.
And they’re not just dipping their toes in the water — they’re diving in headfirst.
In 2020, MicroStrategy invested $425 million into Bitcoin, with CEO Michael Saylor calling it “the best money ever created.” MicroStrategy now holds approximately 214,246 BTC (worth $13.8 billion at current prices), which is more than 1% of ALL the 21 million bitcoin that will ever exist.
Square followed suit, allocating $50 million of its cash reserves to Bitcoin.
And in early 2021, Tesla made waves by purchasing $1.5 billion worth of Bitcoin.
But it’s not just corporations buying chunks of the Bitcoin pile. PayPal now allows its 350+ million users to buy, sell and hold cryptocurrencies.
And Visa has integrated Bitcoin into its global payment network. The new integration allows users to withdraw cryptocurrencies like Bitcoin directly from a wallet like MetaMask to a Visa debit card.
And nearly a dozen major financial institutions like BlackRock, Fidelity, Grayscale and other huge investment companies have launched various Bitcoin based ETFs for their clients. These Spot ETFs debuted in the U.S. on January 11 with much fanfare, promising to pull billions of dollars in institutional money.
To date, they’ve more than lived up to that hype, exceeding everyone’s expectations. BlackRock’s IBIT alone has amassed more than $15 billion, while the twenty-four other funds taken together have registered a net inflow of over $12 billion.
And an interesting aspect of Blackrock’s inflow’s in the first several months is that nearly 90% of that money has been coming from retail investors (John Q Public) not the huge pension funds, uber wealthy family offices and other big money managers…just yet.
According to renowned analyst Willy Woo, Bitcoin is on the verge of a monumental leap, expecting it to match the Internet’s growth trajectory from 1997 to 2005.
Woo believes this tectonic shift in adoption has been brewing for years.
“1 billion people will own Bitcoin by the end of this cycle,” Woo said.
He highlighted the digital currency’s accelerated adoption rate, which outpaces that of the early Internet.
The influx of institutional money is a game-changer. As result, we saw an unprecedented new all-time high just months before the halving. That’s NEVER happened. Not even close.
Now, Hong Kong just introduced its own crypto ETFs.
Considering the Asian cryptocurrency market is the size of the North and South American AND European crypto markets combined? That’s going to be an awful lot more money potentially flowing into the Bitcoin network.
As more institutional players enter the market, they bring increased liquidity, stability and mainstream credibility to Bitcoin. However, it’s not the only factor driving Bitcoin’s adoption. Behind the scenes, Bitcoin’s technology is evolving at a rapid pace.
Reason #4: Technological Advancements and Network Effects
Bitcoin isn’t just digital gold — it’s a living, breathing technology that’s constantly evolving.
And with each upgrade, Bitcoin becomes more valuable, useful, and unstoppable.
The 2021 Taproot upgrade was a significant improvement to the previous Bitcoin protocol that was activated in 2017. It demonstrated the ongoing evolution of the Bitcoin protocol to meet the growing demands and challenges of the digital currency ecosystem. This Taproot upgrade introduced improvements in privacy, efficiency and smart contract capabilities on the Bitcoin network.
Moreover, Bitcoin’s Lightning Network, a “layer two” payment protocol, enables near-instant, low-cost transactions, making Bitcoin a more serious contender for everyday purchases and micropayments, increasing its potential for further widespread adoption.
According to Metcalfe’s Law, a network’s value is proportional to the square of the number of its users.
With Bitcoin’s user base growing exponentially, from 35 million in 2018 to over 460 million in 2024, and the introduction of Spot Bitcoin ETFs in 2023, its value proposition has gone from a speculative asset to a core financial instrument.
If Willy Woo is right, Bitcoin will dramatically increase in value in the coming years.
Reason #5: The Bitcoin Cycle
What if I told you that I could predict, with uncanny certainty, when Bitcoin would reach new all-time highs and when it would drop like a stone off a cliff.
You’d think I was delusional, right?
But I can. And so can you!
Thanks to the ridiculously predictable timeline of returns that follow each halving date in Bitcoin and provide an annualized pattern of up, up, down, up each and every four years since it was first introduced 16 years ago.
Why do you think Larry Fink, CEO of Blackrock, who used to pan Bitcoin every chance he got, suddenly changed his tune and is now outspoken Bitcoin evangelist?
The answer? His highly paid analysts showed him four consecutive cycles of near to-the-day predictability of what Bitcoin will do at certain times within each four year cycle.
Up in price the year the halving occurs.
Up more the following year with a new all-time high close to the end of that year.
Down dramatically in the third year of the cycle, bottoming out quickly, often losing more than 70% of its value.
Then up again in the last year of the cycle as the recovery gains significant strength.
Will it continue to be that easy?
Maybe, but the ETFs could have an effect that may make the downturns even less. We’ll see come 2026. However, the most compelling reason to invest in Bitcoin is its ability to strengthen and diversify your investment portfolio.
Reason #6: Diversification Benefits in Investment Portfolios
In a world of economic uncertainty, Bitcoin is the ultimate hedge. It’s the One-Stop-Shop of assets, providing diversification, protection, and growth potential all in one.
Studies have shown that adding just a small amount of Bitcoin to a traditional 60/40 stock/bond portfolio can significantly improve risk-adjusted returns.
For example, from April 2017 to April 2024, Bitcoin’s ROI was 4,647% compared to the S&P 500’s 111% in the same timeframe, or Gold at 83%. And you’ll note that includes the year that Bitcoin crashed hard. This demonstrates Bitcoin’s potential to enhance any portfolio’s performance, even in small doses.
Longer term?
Had you invested even just 1% of your portfolio in Bitcoin in 2013, while the S&P 500 gained 218% in that Baker’s dozen of years, your 1% investment in Bitcoin would have grown by 45,261%.
Time IN the market versus TIMING the market works for Bitcoin as well.
So the New Mantra is: Don’t wait to buy Bitcoin. Buy Bitcoin and wait. Or is it?
The evidence is clear that Bitcoin is a force to be reckoned with. The stars have aligned once again for Bitcoin to make a massive move in the coming months. But wait a minute…here’s the other side of that coin – 6 reasons you shouldn’t buy any Bitcoin this year…or maybe ever.
Reason #1: It’s Too Expensive.
Bitcoin is fast becoming the Berkshire Hathaway A shares of cryptocurrency.
It’s been expensive for a while, but this year, it’s surged to record highs – breaking through the $70,000 mark for the first time in its history. Which means that to score just a 100% gain – a relatively small win by crypto standards – Bitcoin would have to go to nearly $150,000 per coin.
And of course that could happen – in fact, as mentioned before, there are plenty of pundits who think it’ll double that number and then some, but still, even a 300% gain is kinda small compared to what some other coins have done in the recent past.
For example Fetch AI (FET), an Ethereum token that powers Fetch.ai, a decentralized machine learning platform for applications such as asset trading, gig economy work, and energy grid optimization, is already up more than 4,000% from its last cycle low.
Which means, there are plenty of better opportunities to make MUCH BIGGER gains in crypto if you know where to look.
Another reason not to buy Bitcoin is its popularity.
Reason #2: It’s Too Mainstream
Everyone and their grandma knows about Bitcoin.
It’s now the cryptocurrency “industry standard” which is why it was the first crypto to garner ETF approval by the SEC.
And while that’s definitely a plus for the crypto market in terms of lending credibility to the cryptocurrency in general, that also means you’ll be competing for profits with millions of other people who ONLY know about Bitcoin. In almost every case of big money making cryptos, once it gets all sorts of publicity, the real millionaires have already been made.
Bitcoin’s been in the news for more than a decade. Seriously hard to make you into the next “crypto gazillionaire” that way, no?
Because it isn’t the only cryptocurrency available, looking into others and finding out which ones besides Bitcoin are doing well is essential.
Reason #3: It Lacks Utility
Updates don’t really matter if they’re never utilized.
What some people call “digital gold” others call an “imaginary coin” because it’s an intangible that only seems to have value because a group of zealous investors say it does.
While Bitcoin is an excellent form of decentralized finance, it doesn’t offer the same kind of widespread usability that other crypto tokens do.
For example, there are cryptos out there right now that are revolutionizing everything from payment processing to real estate, gaming and even recycling. Plus, they’re doing it far more cost effectively than Bitcoin.
The most obvious alternative to Bitcoin (aka an Alt coin) is the “Queen” of cryptos, Ethereum. ETH is a decentralized software platform that enables smart contracts and decentralized applications to be built and run without any downtime, fraud, control, or interference from a third party.
Another popular Alt coin is the native token for the XRP Ledger, created as a payment system by Ripple in 2012. Despite legal troubles here in the US, XRP is used by hundreds of international banks around the globe.
Another prime example is Solana (SOL), a blockchain platform designed to support decentralized applications (dApps). Sometimes referred to as an ‘Ethereum killer,’ Solana performs many more transactions per second than Ethereum. Additionally, it charges lower transaction fees than Ethereum.
Filecoin (FIL) is an alternative to cloud-based file storage.
Audius (AUDIO) is attempting to break down the walls in the music industry.
And the Basic Attention Coin (BAT) is incentivizing switching from Google to a new search engine called Brave, by rewarding its users for looking at advertising on Brave with BAT tokens.
Needless to say, the cryptocurrency marketplace has evolved far from what Satoshi thought it would become and the opportunities for other cryptos to become even more mainstream than Bitcoin is continually growing.
Reason #4: Bitcoin’s Dominance May END This Cycle.
While Bitcoin is still the world’s leading crypto, there’s a real chance it could be dethroned…as soon as next year. I admit that this one is longshot, but it’s still a possibility.
Not only are several cryptos much more useful than Bitcoin but people who actually use and develop applications on the blockchain using crypto are NOT doing it with Bitcoin.
If you’re going to buy cryptocurrencies in this cycle you should be doing research into which ones are the best bets for 1000% jumps in value based on actual usage, NOT because you read somewhere on the internet that this coin or that coin is going to be the “next Bitcoin”.
Reason #5: The Biggest Bitcoin Gains Have Already Been Made
The crypto market in its entirety is worth over $2.63 TRILLION dollars and Bitcoin ALONE makes up for $1.33 trillion of that – more than HALF of the value of ALL cryptocurrencies.
That means that if you wanted to actually profit big from Bitcoin, you should have done it a LONG time ago. The ‘turn $1 into $1 million’ opportunity bus left a long time ago and you weren’t on it. And if you’re standing at the station looking down the road?
Sorry to break it to you but it’s not coming back.
Reason #6: Bitcoin’s Rising Tide Floats All Boats
Despite all of the reasons NOT to buy Bitcoin, it’s still likely to surge much higher and just like has happened in every cycle before this one, the BIGGEST gains are going to come from the tiny cryptos that initially ride Bitcoins coattails and then leave it in the dust on their way to the moon in terms of percentage gains.
Take a look at Coinmarketcap’s list of the top 100 cryptocurrencies and that should give you plenty of ideas for alternative investment beyond Bitcoin.
Just please don’t buy into meme coin hype.
So, there you have it
Both sides of the cryptocurrency investment argument.
Either way, NOW is the time to position yourself for potentially life-changing gains in the years ahead.
Whether your investment is big or small, don’t miss this once-in-a-generation opportunity.
Full disclosure: Upwards of 60+% of my cryptocurrency portfolio is straight up Bitcoin, and give or take a few percentage points, around 20% is Ethereum, with the remaining 20% made up of various percentages of some 40+ different Alt coins. Truth be told I fully expect that a few of those will blow the doors off the ROI I’ll get from Bitcoin, but at this point, so early in the cycle, it’s a total question mark which ones.
If you want to know what Alt coins I’m investing heavily in, feel free to email me at john.logan@moneytree.ventures.
Subscribe to my blog so you’ll get alerts when new posts like this come out.
And if you haven’t done so already, get my book and learn how to plant your own money tree.
