“Despite being at all-time high prices, it is still a very opportune time to buy bitcoin (BTC).” This is according to a new analysis by the investor author of the newsletter “The Value Edge”.
Many skeptics will remain hesitant to buy at all-time highs, thinking that such a volatile asset may be on the verge of a correction, he says. However, consider that there are factors that will contribute to bitcoin continuing to post parabolic returns. Therefore, consider that any quote is an investment opportunity.
“In fact, I think that the next time we see a major correction in bitcoin, it may be a ‘pullback’ to a much higher price than the current one,” he maintains. Since its origin, BTC has gone through intense bullish and bearish cycles in which it always records higher highs and lower lows, something that the current outlook suggests will be repeated.
For the author, “we are at the beginning of another period of intense bullish performance of bitcoin prices due to greater institutional participation amid the increasingly slow supply that is built into the core of the Bitcoin network.”
The price of bitcoin throughout history can be seen in the following graph.
To put it in perspective, he introduces that Michael Saylor and his company MicroStrategy made headlines by announcing that this plans to buy USD 42 billion in bitcoin over the next three years. Because this company, famous for buying BTC on a recurring basis and being the one that has the most, will continue to contribute to the rise in price, not only without selling its holdings, but by accumulating more.
As seen below, MicroStrategy holds 279,420 BTC, currently valued at $25.5 billion, double its acquisition price. The green circles show the times in which you have made purchases, while the green line shows your average acquisition cost and the blue line shows the price of bitcoin.
In addition to this, the Block company purchases bitcoin monthly using 10% of its gross profit from the products it offers from the currency. Additionally, bitcoin exchange-traded funds (ETFs) provided by large institutions such as BlackRock and Fidelity project greater bitcoin adoption.
Meanwhile, the giant technology company Microsoft will have a shareholders meeting in December to decide whether to buy bitcoin. “While management recommended shareholders vote against, it is indicative of broader acceptance and conversation around the use of bitcoin as a reserve asset,” says The Value Edge.
It should also be noted that Microsoft shareholders such as Vanguard, BlackRock and State Street will be eligible to vote about the proposal. “All of these now have a personal interest in increasing the adoption rate of bitcoin,” the newsletter clarifies, so they could boost your purchase.
The rise in institutional ownership of bitcoin comes at a time when some nations have begun to accept bitcoin as legal tender, he notes. This occurs while the number of participants in the cryptocurrency sphere is increasing.
Added to this is that Donald Trump, president-elect of the United States, plans to have a strategic reserve of BTC, in addition to promoting the cryptocurrency industry. This “has the potential to trigger another parabolic period for the price of bitcoin,” the financial bulletin notes.
If the United States buys bitcoin, other governments will follow
Currently, as reported by CriptoNoticias and seen below, the United States is the government that owns the most BTC, a holding that has come from seizures. This is something Trump wants to keep as a strategic treasury reserve. Additionally, there is a bill underway in the country to start a bitcoin purchasing program.
From the perspective of the nation-state, ownership of bitcoin is a question of game theory, The Value Edge explains. It’s risky to be among the first to act, but it’s equally risky to be a laggard, he warns. Therefore, With both retail and institutional adoption increasing, governments will hopefully also enter.
“If the United States starts accumulating bitcoin, virtually every other nation will have the incentive to accumulate bitcoin,” exclaims The Value Edge. Additionally, some analysts believe this could help the economic powerhouse pay off its exploding national debt.
“The confluence of factors contributing to the growth in demand for bitcoin is powerful. Taken together with the 2024 halving, which cut supply growth in half, and optimism around a pro-crypto Trump administration, this is nothing short of a golden opportunity to accumulate bitcoin.”
The Value Edge, investment research newsletter.
So, beyond any criticism there may be, he summarizes that “what matters is the increasing number of hodlersgrowing institutional adoption and growing adoption by nation-states,” he summarizes.
The term holders refers to enthusiastic bitcoin investors who hold the currency for the long term.
Bitcoin shows exploding demand and slowing supply
The bulletin also explains that The most widely understood benefit of bitcoin over fiat money is its fixed supply. Unlike national currencies such as the US dollar (USD) or any other, bitcoin cannot be issued unlimitedly at the discretion of a government.
The issuance of bitcoin, which is produced by decentralized mining, is automatically halved every four years through an event called halving. And it has a finite supply of 21 million units of BTC, so once they are all mined (expected for the year 2140) no more can be issued.
This characteristic of bitcoin contributes to its price risesince it implies a limited supply, as well as a factor that attracts new demand. That is why it is called an anti-inflationary asset, the opposite of fiat money that devalues and generates inflation due to its unlimited issuance.
“Bitcoin’s slowing supply growth and its increasing institutional adoption, especially after Trump’s victory, indicate strong fundamentals and a bullish outlook for continued price growth,” The Value Edge concludes.
In all Economics courses, students are taught that the balance between supply and demand dictates the behavior of prices in free and open markets. And, as shown below, the price of bitcoin is a clear example of this, the bulletin explains.
“Regardless of your opinion on blockchain technology or cryptocurrencies, it is dangerous to bet against basic economics,” mentions The Value Edge. Because The reality of bitcoin currently presents exploding demand and slowing supplydetails.
“With the confluence of factors contributing to strong demand growth, I expect another parabolic period for the price of bitcoin in 2025,” he clarifies. AND foresees that the next correction is to a higher low, above the current price or in this zone.
So, in the face of these bullish expectations, it is advisable to carry out the investment strategy known as dollar cost avarage (DCA). This operation consists of recurring purchases of an asset with upward potential to average the acquisition cost.
“DCA’s approach is useful for both retail investors and institutions,” he exclaims. MicroStrategy, the largest investor in bitcoin after its creator Satoshi Nakamoto. This currently records unrealized profits of USD 15 billiondespite having made part of its purchases at historical highs in the last bullish cycle.
“A DCA strategy is key, as exemplified by Michael Saylor’s MicroStrategy, meaning bitcoin is a buying opportunity at any price,” the newsletter concludes. In other words, it concludes: “bitcoin is still a good buy despite having reached all-time highs.”