Financial asset prices go through cycles. The tide of sentiment will rise and fall, and there will be boring periods to shake out the less patient investors. I encourage you to look into Bitcoin (BTC-USD) during its calm period, as that’s the perfect time to be a buyer.
Granted, 2024 is inherently interesting because it’s an election year. Should this inform your decision about buying Bitcoin? It’s a valid question, but don’t let political considerations distract you from the most important reasons to put some “digital gold” in your portfolio.
Bitcoin: The Thrill Is Gone (for Now)
The first half of 2024 has been unusually exciting for cryptocurrency enthusiasts. First of all, the U.S. Securities and Exchange Commission finally approved some spot Bitcoin exchange-traded funds.
In addition, Bitcoin underwent its halving/halvening event, in which the reward for mining Bitcoin was cut in half. This event, which is intended to limit the growth of the circulating supply of Bitcoin, typically only happens once every four years.
One cannot reasonably expect the rest of 2024 to be as thrilling as the first six months were. Although the upcoming presidential election may be an exciting event, I don’t recommend trying to guess Bitcoin’s next price move based on politics.
The Biden’s administration’s stance on Bitcoin isn’t entirely clear. Direct statements from President Biden on Bitcoin are difficult to find. The SEC under the Biden administration did approve spot Bitcoin ETFs, but that’s not an outright endorsement of cryptocurrency.
Meanwhile, former President and current presidential candidate Donald Trump recently expressed support for Bitcoin. Whether anyone, be it Biden or Trump, can actually push pro-crypto policy through a deeply dividend Congress is anyone’s guess, though.
Get Yourself Some ‘Digital Gold’
Instead of focus on politics, I invite you to think in terms of market cycles. After a “trending” period, there will often be a “consolidation” period. This allows the market to digest its gains, potentially before the next leg up.
I suspect that the next leg up will occur when financial advisers start to accept and embrace Bitcoin as a legitimate cash alternative. Currently, financial advisers generally don’t trust or believe in Bitcoin.
Bitcoin’s path from $70,000 to $100,000 and more will, I believe, be paved with the endorsement of these advisers. They collectively control vast quantities of investable capital. Yet, if you’re a self-directed investor, you can forge your own path.
Maybe you don’t want to keep too much cash in your account, since U.S. dollar inflation is frustratingly persistent in 2024. Gold offers inflation-resistant properties — but then, so does “digital gold,” i.e., Bitcoin.
You can recognize the value of Bitcoin’s limited supply, even if some financial advisers don’t seem to appreciate it. Sooner or later, they’ll have to start recommending Bitcoin if enough of their clients demand it. It’s probably just a matter of time.
Bitcoin: Let Boredom Work in Your Favor
I really like the idea of buying high-conviction assets when most people aren’t paying attention to it. Sometimes, this means buying when others are selling. With Bitcoin right now, however, it means buying when the price action is boring.
After all, it’s not going to be thrilling all the time. Consolidation periods are a great time to add to one’s position in anticipation of the next big price move. So, lean into the boredom and grab some “digital gold” before Bitcoin embarks on its next exciting phase.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
