Is Bitcoin a Buy Right Now & How To Make the Best Investment Choice

Bitcoin has seen its fair share of ups and downs, with prices increasing dramatically. While these price fluctuations can make it hard to keep your lunch down, they also create investment opportunities. Every time Bitcoin’s price pulls back, investors face a critical question: Is Bitcoin a buy right now? By examining factors such as Bitcoin Annual Returns, this article will help you answer that question confidently so you can determine whether Bitcoin is a wise investment and decide on the best strategy for investing in BTC.

One of the best ways to answer the question, “Is Bitcoin a buy right now?” is with reliable Bitcoin analysis. Bitcoin Magazine Pro provides valuable insights to help you achieve your investment goals, whether to buy Bitcoin for the first time, increase your current holdings, or time your next investment to maximize your profit.

Is Bitcoin a Buy Right Now?

Bitcoin and USD - Is Bitcoin a Buy Right Now

Bitcoin is likely headed to new highs in 2025 after surging nearly 150% in 2024. Currently trading at almost $104,000, Bitcoin has eclipsed AI superstar Nvidia in the last six months with more than 55% returns while Nvidia stock barely moved. There are reasons to be excited about Bitcoin going into next year, especially considering:

Political
Administrative
Market developments

Bitcoin has traditionally been regarded as a speculative asset with no real economic contribution. Nevertheless, it’s hard to ignore its growing legitimacy, increased adoption, and demand.

How Have Recent Regulatory Developments Impacted Bitcoin?

Bitcoin crossed the $100,000 mark for the first time riding on support from the Donald Trump-led administration. In addition to a shift in regulatory view, notable institution adoption, broader ecosystem developments, limited availability, and global macroeconomic uncertainty could put Bitcoin above $150,000 by the end of 2025. But Bitcoin’s rise hasn’t been without its risks and accompanying volatility.

A Growing Interest in Bitcoin Among Institutional Investors

The US government has never been more pro-BTC, and big players are all in. Donald Trump’s evolving stance on Bitcoin bodes well for Bitcoin’s future. His view toward creating a strategic Bitcoin reserve and a need for favorable regulations is reviving confidence. One item on Trump’s presidential campaign agenda was to develop a strategic reserve for Bitcoin.

Legislative Momentum: A Concrete Step Towards Bitcoin Adoption

While it’s still far from materializing, a concrete bill has already been proposed in the Senate. If passed, it would entitle the Treasury and the Fed to build a reserve of about 5% of the global Bitcoin supply within five years to hedge against currency risk, lower the national debt, and support the country’s balance sheet.

Regulatory Changes and Growing Institutional Interest

Historically, skeptic SEC chair Gary Gensler has already decided to step down, which will likely pave the way for Bitcoin-friendly regulations. Donald Trump’s team is contemplating creating a dedicated position in the White House to oversee and drive the blockchain ecosystem.

These developments will likely mitigate the risks of investing in a speculative asset, inviting more players into the market, which is already happening.

Bitcoin’s Role as a Volatility Hedge

Amid the prevailing geopolitical and macroeconomic uncertainty, Bitcoin is emerging as a lucrative investment option and a hedge against crashing fiat currencies, especially in hyperinflationary environments such as:

Venezuela
Zimbabwe
Lebanon

Bitcoin as a Hedge

In 2023, Bitcoin made up 9% of Venezuela’s remittances, with Bitcoin adoption further picking up amid oil sanctions. Bitcoin can also emerge as a viable hedging instrument for governments, with a possibility of central banks diversifying their asset pool with Bitcoin. The U.S. and China are headed that way, and other countries will likely follow suit.

What’s Driving Bitcoin’s Price Surge?

The price surge will likely get a boost from fixed supply and growing demand. This scarcity sets Bitcoin apart from conventional fiat currencies. There are only about 21 million coins in existence today, which is essentially all the bitcoins that have been mined. The rate at which new coins are mined drops around the halving events every four years, with the most recent in April 2024.

Scarcity Drives Bitcoin Price Appreciation

When the reward for mining new Bitcoin is halved, fewer new coins are mined and added to the pool, thus limiting the supply and driving up prices. Historical trends around halving events have shown a subsequent rise in Bitcoin prices.

This year, the price has gone up over 50% since April. Back in April 2020, the price jumped 10x in the one year that followed. Though all the increase cannot be attributed to halving alone, its role is consequential.

What Are the Risks of Investing in Bitcoin Right Now?

Since Bitcoin still lacks intrinsic value, it is susceptible to market sentiment, making its price volatile. Three years ago, Bitcoin dropped almost 50% twice, from March 2021 to June 21 and from Nov 2021 to Jan 2022.

Navigating the Risks

With a limited supply of units, the price is potentially open to manipulation by large institutional investors. Cybersecurity threats to stored Bitcoins and potential environmental impact-related restrictions also add to the risks involved in this asset class.

Also, there have been numerous periods, such as 2018 and 2022, when Bitcoin could not beat the S&P 500. In recent years, consistently beating the broader markets— in good times and bad — has been challenging for individual stocks and even Bitcoin.

4 Ways To Start Investing Now

Person Trading on Mobile - Is Bitcoin a Buy Right Now

1. Centralized Exchanges: The Easiest Way to Buy Bitcoin

Buying Bitcoin through a centralized exchange is like purchasing a stock through an online brokerage. You create an account, deposit funds, and order Bitcoin. When you buy Bitcoin on a centralized exchange, you can either withdraw the BTC to a wallet for safekeeping or keep it on the exchange, similar to keeping cash in a brokerage account.

Luckily for investors, there's never been a more convenient time to be Bitcoin-curious. As it has gained steam in the past few years, mainstream brokerage firms have picked it up. You can purchase Bitcoin directly through some online brokerages such as:

Fidelity
Robinhood
Interactive Brokers

Fractional Shares and Centralized Exchanges

For those without $100,000 to drop on a Bitcoin, these exchanges offer the opportunity to purchase fractional shares. Nevertheless, others, like Charles Schwab and E-Trade, don't provide that option. Fear not if you want to hold Bitcoin directly but can't buy it through your traditional brokerage account.

Several centralized exchanges, such as Coinbase, Kraken, and Gemini, provide a platform for buying and selling Bitcoin.

2. Decentralized Exchanges: For Experienced Investors Only

Some Bitcoin purists prefer buying on a decentralized exchange like some gold investors prefer to purchase bullion. "If you own Bitcoin on a centralized entity, you force someone else to buy it on your behalf, but you don't hold the Bitcoin," Miller said. Decentralized exchanges facilitate peer-to-peer trading without a broker, adding an extra layer of privacy and security.

Nevertheless, a decentralized exchange isn't the most beginner-friendly way to invest, as they have complex fee structures and don't permit exchanges between fiat and Bitcoin.

3. Bitcoin ETFs: A Simple Way to Invest in Bitcoin

The first spot-Bitcoin ETF debuted in the US in January 2024. A spot ETF provides investors with an accessible way of gaining exposure to Bitcoin on a fully regulated traditional exchange. The funds hold Bitcoins in a secure digital vault managed by registered custodians, and shares are issued to correspond with the number of Bitcoins held.

Risks and Considerations

Bitcoin futures ETFs, which hold Bitcoin futures contracts instead of actual Bitcoins, are another investment vehicle. Nevertheless, because they hold financial derivatives, these ETFs might not follow the price of Bitcoin as closely as a spot ETF. They can experience increased volatility due to the risks associated with futures contracts.

A Beginner-Friendly Approach

Bitcoin ETFs are Cannon's go-to recommendation for new investors in the Bitcoin space, as investors don't have to worry about directly holding Bitcoin in a BTC wallet: "It's just like if they bought a stock," he said. He likes BlackRock's iShares Bitcoin Trust ETF (IBIT) in particular.

Other examples of Bitcoin ETFs include:

Fidelity Wise Origin Bitcoin Fund (FBTC)
Grayscale Bitcoin Trust ETF (GBTC)
ProShares Bitcoin ETF (BITO)

4. Bitcoin-Adjacent Companies: A Less Risky Way to Invest in Bitcoin

Similar to how central banks stockpile gold, some of the market's most prominent companies are building up their bitcoin reserves, even if their business operations have nothing to do with Bitcoin. John Haar, the managing director of the Bitcoin financial services firm Swan Bitcoin, has seen investors increasing their Bitcoin allocation indirectly by buying these companies' stocks.

The business intelligence company Microstrategy (MSTR) is the most notable example in the market right now. Haar said other companies adding Bitcoin to their balance sheets include the biotech company Semler Scientific (SMLR) and the Japanese investment firm Metaplanet (MTPLF).

Bitcoin Mining Companies

Haar added that investors can also get Bitcoin exposure by going straight to the source and buying stock in Bitcoin-mining companies. As a decentralized asset, Bitcoin depends on a network of users to record transactions and verify new ones. Bitcoin miners use specialized software and hardware to solve complex puzzles and confirm the addition of blocks to the public ledger. Haar pointed to two examples:

Riot Platforms (RIOT)
Mara Holdings (MARA)

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Is Bitcoin a Buy Right Now & How To Make the Best Investment Choice

Jan. 18, 2025