But de Bitcoin (Cryptocurrency: BTC) Despite soaring to new heights and renewed enthusiasm around new spot Bitcoin exchange-traded funds (ETFs), the cryptocurrency industry still struggles to attract new investors. According to The Motley Fool Ascent's 2024 Crypto Investor Trends Study, the core demographic in crypto remains young men from the Gen Z and Millennial generation.
This is especially surprising given that we keep hearing about cryptocurrencies finally going mainstream. Even more surprising, one of the reasons skeptics don't invest in cryptocurrencies is that they are too expensive. That's simply not true. Here's why:
bitcoin sticker shock
There are different ways to interpret cost as a reason not to invest in cryptocurrencies. But perhaps the most likely interpretation is what can only be described as Bitcoin sticker shock. Imagine the scenario. I finally decided to buy a small amount of Bitcoin, but when I checked the current price it was well over $70,000. You quickly decide that Bitcoin is not for you.
But that's a grossly myopic view of the problem. First, you don't have to buy an entire Bitcoin. Purchasing fractional shares is just as easy. In fact, you can trade for as little as $1 on many popular cryptocurrency trading platforms. With that small amount of cash and today's price, you could be the proud owner of 0.00001 Bitcoin.
Therefore, buying Bitcoin is different from buying new tesla Cybertruck. Both prices may be about the same, but you'll never drive a fractional Tesla Cybertruck on your lot.
Even if you don't feel comfortable buying fractional shares of Bitcoin, there are still ways to lower the cost of owning Bitcoin. For example, you can gain exposure to Bitcoin through the new Spot Bitcoin ETF. They track the performance of Bitcoin and the two most popular spot Bitcoin ETFs. iShares Bitcoin Trust (NASDAQ:IBIT) And that Fidelity Wise Origin Bitcoin Trust (NYSEMKT:FBTC) — Still priced under $70. If you're dealing with Bitcoin sticker shock, a crypto ETF entry price this low may be enough to overcome the psychological barrier of sky-high Bitcoin prices.
Is Bitcoin overvalued or undervalued?
Another way to interpret the “too expensive” excuse is that investors perceive Bitcoin to be overvalued at its current price. Given that Bitcoin just hit an all-time high of $73,750 in mid-March, some may think it would be better to wait for the price to drop in order to buy Bitcoin at a discount. Of course.
Buying on the dip is certainly a valid strategy for buying Bitcoin, but I don't think most people have this in mind. In fact, they probably think it's too late to invest in Bitcoin. After all, Bitcoin has risen sharply from $1 to $70,000 over the past decade or so, leading many to conclude that Bitcoin doesn't have much upside potential over the next decade. maybe.
But that's not the traditional thinking on Wall Street today. There is a growing consensus that Bitcoin will reach $100,000 by the end of 2024 and $150,000 by the end of 2025.
And from there, the sky is the limit. According to Ark Invest's Cathie Wood, the price of Bitcoin could reach $3.8 million by 2030. If you invest now, your return on investment could still be close to 50x. So, if anything, Bitcoin is undervalued and not overvalued at its current price.
Forget about budget cryptocurrencies
The real flaw in the argument that Bitcoin is overvalued is that Bitcoin tends to force people to buy meme coins that are really, really, really cheap. With a few exceptions, many of these meme coins trade well below $1. for example, Shiba Inu (Code: SHIB) It is trading at an incredibly low price of just $0.00003.
But does anyone really think Shiba Inu is a better investment than Bitcoin? Does anyone really believe that stocking up on dog-themed meme coins is better in the long run than buying fractional shares of Bitcoin? Is there anyone who does? If the answer is yes, I simply answer. You get what you pay for.
Should you invest $1,000 in Bitcoin right now?
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Dominique Basurto has a position in Bitcoin. The Motley Fool has positions in and recommends Bitcoin and Tesla. The Motley Fool has a disclosure policy.
Some skeptics say cryptocurrencies are too expensive. I disagree. Here's why:Originally published by The Motley Fool
