Should you buy Bitcoin when it’s under $100,000?

Last year was a great time to be Bitcoin (Bitcoin 2.43%) Investor, as the price of the digital asset more than doubled in 2024. This was consistent with its long-term behavior – a journey marked by extreme volatility along an overall upward trajectory.

On the last day of 2024, the world’s top cryptocurrency was trading at around $92,000, 15% below its all-time high. Should you buy Bitcoin when its price is under $100,000?

Bitcoin is taking a breather

Bitcoin has benefited from a Post-election boom The investment community has become very optimistic about the next administration’s ability to take a friendlier regulatory stance towards cryptocurrencies. However, Bitcoin is taking a break at the moment. So some could view this as an opportunity to buy the dip.

This is because falling prices are nothing new for Bitcoin. In fact, they’re par for the course. A long time ago Huddlers – Crypto Language of Holders – Know that the ability to deal with volatile ups and downs is a prerequisite.

During Bitcoin’s 16-year existence, its price has fallen by more than 50% on six different occasions, and by more than a third on several other occasions. Every time such a sharp sell-off occurs, Bitcoin is declared dead by numerous media outlets, pundits and so-called experts who point to its increasing use in illicit activities, or assert that it has no use or value at all, among other things. Other.

The ever-bearish views have proven wrong, as Bitcoin price continues to recover and rise. If history is any indication, the top cryptocurrency will continue to trend toward higher highs and higher lows.

Digital scarcity

Bitcoin bulls often Comparing it to golda store of value for a very long time. On the surface, this seems logical.

Gold is a rare element, and while more of it is being extracted steadily, the Earth only contains a fixed amount of it. Although it has some industrial applications, the main uses of gold are in jewelry making or as an investment vehicle. In essence, it has high value because people have decided it is valuable, not necessarily because it is useful in any meaningful way.

You could say that Bitcoin is viewed similarly: its value derives from the simple fact that people have decided to view it as having value. But Bitcoin is more scarce than gold, because the amount of new supply coming into the market cannot be changed in response to increased demand. The total supply of mineable Bitcoin is 21 million coins – more than 19.8 million of which have already been mined.

On the other hand, gold becomes more economical to mine in hard-to-reach areas when its price rises. This allows the supply of new gold to grow if economic conditions require it. There is even talk of prospecting for gold in outer space, where there are believed to be some asteroids with huge deposits.

In addition to its scarcity, Bitcoin is easier to transfer, easier to use in transactions, and more divisible than gold. In a world where economic activity will become more digital, it is not crazy to think that Bitcoin will have a place as a store of value for many people around the world.

Huge upside down

Since Bitcoin generates no revenue, profits, or cash flow, it is impossible to use traditional currencies Stock valuation metrics To set a price target on it. However, comparing it to gold can again help us in our analysis of the asset.

The current value of all above-ground gold is about $17.7 trillion, based on recent market prices. Bitcoin has superior properties compared to the precious metal, so it is perhaps conservative to believe that the cryptocurrency could rise more than nine-fold to at least match the market value of gold one day. In this scenario, the final price of Bitcoin, based on the current supply of tokens, would be around $900,000.

This makes purchasing this digital asset while its price is under $100,000 seem like a smart choice.