3 Reasons to Buy It Now and Hold Forever

In a crypto bull market like the one we find ourselves in, it can be difficult to discern which asset is best for your portfolio. Perhaps the old adage, “If it ain’t broke, don’t fix it,” applies here.

While dozens of new cryptocurrencies have emerged since Bitcoin (CRYPTO:BTC) became the world’s first crypto, there’s a compelling case that it remains the best, with positive tailwinds heading into 2024 and beyond. Here are three reasons why Bitcoin is set to soar this year and is worth holding forever.

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1. Bitcoin’s fourth halving

The first reason to hold onto Bitcoin now and forever is its recent fourth halving, which took place in April. A halving event is when the reward for mining new Bitcoin blocks is cut in half. Since mining is the primary means by which new Bitcoins are minted, reducing the reward given to miners essentially halves Bitcoin’s inflation rate. This process will continue until 2140, when the last Bitcoin is mined.

Halvings occur approximately every four years and have historically had a significant impact on Bitcoin’s price. By changing supply and demand dynamics, halvings often trigger a bull run and create a scarcity effect that typically drives the price up. On average, Bitcoin jumps more than 120% in the year of the halving. If historical averages hold true this time around, we could see Bitcoin reach almost $100,000 by the end of the year.

2. Post-halving performance

The second reason to hold Bitcoin lies in its performance in the years following halvings, which have historically been particularly explosive. While there are often significant price increases immediately following a halving, it usually takes some time for the full impact to kick in. This delay occurs as the decreasing supply gradually meets the increasing demand, putting significant upward pressure on the price.

Historically, Bitcoin has gained more than 400% in the years following a halving. If history repeats itself, that would be enough to send its price to around $500,000 by the end of 2025. While past performance is not always indicative of future results, it’s reasonable to expect the effects of the most recent halving to have not yet fully materialized. In other words, the best may still be ahead for Bitcoin during this bull market, making it an attractive investment even at today’s prices.

3. Long-term catalysts are abundant

While Bitcoin has short-term catalysts stemming from the halving that should make the next year and a half productive, the cryptocurrency’s real shine comes when you consider its long-term potential. There are several catalysts that support the case for investing in Bitcoin for the long term.

Rising institutional adoption is one such catalyst. More and more institutions are recognizing the value of Bitcoin. More than half of the top 25 hedge funds have exposure to Bitcoin, with the recent launch of spot Bitcoin exchange-traded funds (ETFs). Deep-pocketed institutional investors have previously been excluded from the Bitcoin game, but their arrival marks a major shift in the playing field, which has been dominated by small retail investors for the past decade and a half.

Additionally, there is a clear push to bring in more supportive legislation. As regulatory clarity encourages broader participation in Bitcoin and the crypto market in general, adoption will likely continue to increase as the rules of celebrity become clearer.

Then there’s the gradual coming of age of new generation investors. Older generations like baby boomers are less likely to invest in digital assets. But younger investors are much more comfortable with them and are likely to seek them out. Bitcoin, the most valuable cryptocurrency, is sure to benefit from this trend.

However, these are not even my top reasons for investing in Bitcoin long-term. At a granular level, the most appealing aspects of Bitcoin are its fundamental foundations of decentralization, security, and finiteness. In an uncertain economic environment where government deficits continue to rise, fiat currencies are losing value, and trust in those in power in general is diminishing, Bitcoin offers economic sovereignty. You could call that a long shot.

As more halvings occur and it approaches its limited supply of 21 million, there is a clear trajectory where Bitcoin will come under exponentially more pressure as demand increases, creating a scenario where the price could reach seven figures.

Maintaining a measured approach

While there are reasons to be optimistic about Bitcoin in the short term, it is imperative that investors approach it with a long-term perspective. The recent halving and historical post-halving performance provide strong examples of significant price appreciation in the near future. However, Bitcoin’s true value lies in its long-term potential, driven by institutional adoption, supportive legislation, and a shift in investor preferences toward digital assets.

Bitcoin’s core qualities of decentralization, security, and limited supply make it a solid investment in a world of growing economic uncertainty. As more investors realize these strengths, Bitcoin’s demand should continue to grow, potentially leading to significant price appreciation. So whether you’re looking at short-term catalysts or long-term potential, Bitcoin remains a valuable addition to your investment portfolio. Holding Bitcoin now and forever could be one of the most strategic financial decisions you can make.

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RJ Fulton has positions in Bitcoin. The Motley Fool has positions in Bitcoin and recommends it. The Motley Fool has a disclosure policy.

This Cryptocurrency Will Soar in 2024: 3 Reasons to Buy Now and Hold Forever was originally published by The Motley Fool