Welcome back, fellow investors, to Investing Pioneers, the blog where we explore the exciting world of finance and investing. Today, we’re going to discuss the recent comeback of Bitcoin and whether you should add it to your portfolio.
As you may already know, Bitcoin has nearly doubled in value since January, with an 83% increase. This comeback story is a testament to Bitcoin’s resilience in the face of adversity. In 2022, Bitcoin, like many other cryptocurrencies, suffered a sharp decline of nearly 65%. However, it’s making a remarkable recovery in 2023.
Michael Saylor, the co-founder of MicroStrategy and a well-known Bitcoin supporter, recently revealed that his company bought 6,455 Bitcoin in late March, worth $150 million. MicroStrategy now owns 138,955 total Bitcoin worth almost $4.2 billion. Saylor’s investment is a hefty vote of confidence in Bitcoin, but one shouldn’t base their investment decisions solely on someone else’s actions.
Instead, let’s revisit Bitcoin’s investment case. The overarching theme for Bitcoin is that it’s a store of value, similar to gold or silver. Bitcoin can protect investors from two critical problems of the fiat-based financial system. First, Bitcoin has a limited supply of 21 million coins, which is a hedge against inflation that continually devalues fiat currency as more is created. Second, it’s decentralized, independent of central control like the U.S. financial system, which is dominated by the Federal Reserve.
Moreover, Bitcoin’s scarcity and independence from any person or party controlling it have driven demand and fantastic investment returns. Bitcoin has easily outpaced the S&P 500 despite the coin’s dramatic decline in 2022. Some might argue that Bitcoin’s volatility disqualifies it as a store of value, but Bitcoin doesn’t seem any more volatile than silver and gold.
But is Bitcoin’s comeback just beginning? It’s possible that the crypto winter, as some call it, is nearing its end, and Bitcoin’s long-term appeal is still intact, especially after the near-miss of another crisis in the modern banking system. Bitcoin will likely remain a volatile asset, but it could have more up days than down if the market’s sentiment toward riskier assets turns positive.
So, should you add Bitcoin to your portfolio? That depends on your investment thesis and risk tolerance. As always, I recommend that you do your own research and make your own investment decisions. I do hold a significant amount of Bitcoin in my portfolio. I am long term holder.
That’s all for today’s Investing Pioneers. Stay tuned for more exciting updates from the world of finance and investing. Until then, happy investing!
sourced from The Motley Fool
