There’s still time to buy this legendary cryptocurrency.
It’s been a great week for crypto investors. The prices of many major cryptocurrencies have soared in recent days, and many experts are looking for further upside. In fact, Cathie Wood, an iconic investor known for her aggressive investing style, believes one legendary cryptocurrency still has more than 5,300% upside potential.
This famous cryptocurrency remains the best option
When it comes to the cryptocurrency market, no asset is as well-known as Bitcoin (BTC 0.33%). There are many great reasons for this. Bitcoin was born as a cryptocurrency in 2009 near the peak of the financial crisis. Since then, hundreds more cryptocurrencies have emerged, and hundreds, even thousands, of crypto startups are looking to contribute to the growing decentralized ecosystem.
This field is clearly still in its infancy, similar to the Internet in the early 2000s. However, innovation continues to advance at an impressive rate, and billions of dollars have been invested in improving the functionality and value of cryptocurrencies.
Despite the massive popularity of the cryptocurrency ecosystem, there is still one cryptocurrency that is the best. It’s the original Bitcoin. With a market capitalization of $1.4 trillion, Bitcoin is the most well-known, adopted, and owned, and remains the undisputed leader in its space. No wonder tech investors like Ark Invest CEO Cathie Wood remain bullish on this classic cryptocurrency.
Earlier this year, Wood revealed that the company’s long-term price target for Bitcoin is around $1.5 million, well above its current trading range of $65,000. But it could be even better if institutional capital were involved on a larger scale than is currently the case. “If an institutional investor were to allocate just over 5% of their portfolio to Bitcoin, that alone would add $2.3 million to the forecast,” Wood explained, adding that the long-term target price would be $3.8 million. There is a potential upside of over 5,000%.
Here’s the best strategy for investing in Bitcoin today
Like many of her predictions, Wood’s Bitcoin price target is extremely optimistic. It’s also worth emphasizing that Bitcoin’s price is unlikely to reach the $1.5 million level any time soon, which means it’s unlikely to reach the $3.8 million level. However, there are many reasons to believe in Bitcoin’s long-term price potential, even if the exact magnitude is not yet visible.
One of the biggest reasons to stick with Bitcoin over other trending cryptocurrencies is that Bitcoin has an advantage that no other cryptocurrency can match: a history of success. Although there have been many bumps along the way, the theory behind Bitcoin’s launch in 2009 remains sound. The underlying mechanisms that allow it to function without centralization are currently beyond criticism. And Bitcoin’s widespread ownership across both retail and institutional investors remains unparalleled. After all, even if other projects like Ethereum are able to layer further complexity and features into the crypto ecosystem, they will never break Bitcoin’s status as the original cryptocurrency with the longest track record. you can’t.
If cryptocurrencies as a whole are successful, there is a very good chance that Bitcoin investors will be successful too. But even if the broader cryptocurrency world fails to materialize, Bitcoin’s core functionality and promise will remain intact, creating a win-win for patient holders.
There are several ways to invest in Bitcoin. However, the best strategy is dollar-cost averaging, which many investors use in traditional investing. This strategy involves regularly buying a set value of an asset (for example, $100 every other month) and is very effective for volatile assets like Bitcoin. Dollar-cost averaging can give you a very long-term view, knowing that you will be buying at all sorts of price points, but be careful, especially if prices suddenly drop. It is necessary. This way, you don’t have to bet on a single entry point and always have an attractive average entry point into an asset that you believe has great long-term potential.
Will Bitcoin ever reach Wood’s lofty $3.8 million price? Perhaps decades or even centuries from now. However, don’t let a specific price target influence your investment strategy. If you want to gain exposure to Bitcoin, start investing now by establishing a dollar-cost averaging strategy that increases your odds of success regardless of where Bitcoin’s price moves in the short term.
Ryan Vanzo has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.
