Is It Time to Buy Bitcoin as It Trades Below $70,000?

Bitcoin has held steady for months, showing strength despite market shifts. After a 48% rise in early 2024, it hit a new high in March but hasn’t launched

Bitcoin has remained largely stagnant for months, exhibiting resilience amidst shifting market dynamics. Following a 48% gain in early 2024, the apex crypto hit a new high in March but has yet to fully enter the bull market that many anticipated.

According to Brave New Coin’s Bitcoin Liquid Index, BTC is still trading below the $70,000 mark, having hit $69,400 this week, begging the question: Is now a good time to buy Bitcoin?

One reason for optimism is the Federal Reserve’s recent decision to lower interest rates for the first time in over four years. Lower interest rates tend to push investors toward riskier assets, which could boost the appeal of Bitcoin as crypto investors seek higher returns.

Another factor is the launch of spot Bitcoin exchange-traded funds (ETFs), which have gained massive popularity. These funds make it easier to invest in Bitcoin by eliminating the need to directly buy and store it, which could attract more investors and drive up demand.

Cumulative net inflows into spot Bitcoin ETFs have surpassed $20 billion since their launch earlier this year. It took gold ETFs 5 years to reach this figure. That makes the Bitcoin ETFs the most successful launch of any ETF in history.

"Bitcoin ETFs have crossed $20b in total net flows (the most imp number, most difficult metric to grow in ETF world) for the first time after a huge week of $1.5b,” Eric Balchunas, Senior ETF Analyst for Bloomberg, wrote on X.

“For context, it took gold ETFs about 5 years to reach the same number. Total assets now $65b, also a high water mark."

Source: X

Irrespective of the upcoming White House election results, the regulatory outlook for Bitcoin appears to be improving. A favorable regulatory environment could bolster Bitcoin’s legitimacy, making it more appealing to everyday investors.

Bitcoin's Unique Qualities and Long-Term Potential

In isolation, the foundational attributes of Bitcoin are compelling. Created 15 years ago, Bitcoin was the first cryptocurrency that enabled two parties to send money electronically without needing an intermediary like a bank. This breakthrough introduced a new level of financial freedom and efficiency, paving the way for the future of digital currencies.

A standout feature of Bitcoin is its fixed supply cap. There will only ever be a maximum of 21 million Bitcoins in circulation, with approximately 19.8 million currently in existence. This limited supply contrasts traditional fiat currencies, which can be printed in unlimited quantities. The fixed supply cap is a crucial aspect that underscores Bitcoin’s value proposition as a deflationary asset.

While past performance is not a guarantee of future results, Bitcoin's historical track record is impressive. According to BlackRock, BTC outperformed every major asset class in seven out of ten years from the start of 2014 through 2023. This strong performance highlights Bitcoin’s potential as a high-yield investment over the long term.

In 2024 alone, Bitcoin has already seen a significant increase of about 60%, outperforming the broader S&P 500 by a substantial margin. This robust performance this year strengthens the case that Bitcoin remains a viable investment option, even as it trades below the $70,000 threshold.

2024 Presidential Candidates Show Support for BitcoinFor the first time, Bitcoin has become a key issue in a presidential campaign. As the November election approaches, former President Donald Trump has positioned himself as a pro-Bitcoin candidate and is widely seen as someone likely to back Bitcoin if he wins office.

Trump has spoken about supporting the U.S. Bitcoin mining industry, floated the idea of creating a national Bitcoin reserve and hinted at Bitcoin’s role in lowering the nation’s $35 trillion debt. He has also vowed to remove SEC head Gary Gensler, who many view as blocking Bitcoin's growth in the country.

If Trump wins, it could be highly favorable for Bitcoin. However, even if he loses, the political climate is clearly shifting in Bitcoin’s favor.

At the moment, the U.S. presidential race is still too close to predict, and this uncertainty may explain why many investors are waiting. However, the outcome of this election could have a major impact on Bitcoin's future.

Taking all these factors into account, investing in Bitcoin while it trades below $70,000 seems like a smart move for many investors, as long as you have a long-term time horizon and are prepared for volatility.

The combination of favorable monetary policy, successful Bitcoin ETFs and 2024 presidential candidates' support for Bitcoin presents a compelling case for investment. Additionally, Bitcoin's historical performance and finite supply provide strong evidence of its potential to deliver significant returns over time.

As the data below shows, on a long enough time horizon, Bitcoin will outpace most other assets.

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