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Is Bitcoin a Good Investment in 2024?

Bitcoin, the top-most cryptocurrency by market capitalization is in the news again. After a gradual but steady rise throughout the year, the leading cryptocurrency hit new all-time highs in double-digit percentages in March 2024, breaking above $70,000 for the first time.

That said, determining whether Bitcoin has any place in your portfolio should go well beyond just what's happening today. Due to its high volatility and risk profile, Bitcoin tends to be only a good choice for individuals with high-risk tolerance, good economic standing, and who can allow the loss of their entire investment.

If you choose to make an investment, it is important that you have a diversified investment strategy that incorporates different asset classes to help reduce your exposure to risk overall. A general rule of thumb is to dedicate no more than 10% of your portfolio to volatility assets such as Bitcoin.

Bitcoin Update in 2024

In 2021, Euro News predict that bitcoin (BTC) to hit a new peak of $88,000 (€82,000) before bottoming out at roughly $77,000 by the close of 2024.

The present price of the cryptocurrency is all around about 43000$.

The study of the UK fintech company Finder focused on price predictions based on 40 expert forecasts of the cost of Bitcoin by 2030.

However, they also found that Bitcoin should hit an average maximum price of $87,875 in the year 2024, with projections even suggesting the price to soar up to $200,000.

Conversely, the average for the lowest price BTC will drop to in December 2024, based on the research, is just $35,734, with some predicting the token may fall as staggeringly low as $20,000.

Pros and Cons Investing in Bitcoin

Bitcoin Pros:

  • The ability to generate large profits has been accessible via bitcoin in the past.
  • It is dispersed. However, many people still decide to trade and hold their Bitcoin on centralized platforms.
  • Similar to gold, Bitcoin has the chance to become an uncorrelated asset. That means it may not follow the movements of other stocks and assets, for example. Despite the fact that Bitcoin has not always correlated with the S&P 500 in the last decade, it has yet to prove itself as a completely uncorrelated asset.

Bitcoin Cons

  • As mentioned above, the price of Bitcoin is subject to increase. It can also drop significantly. It dropped more than 75% from its peak in 2022. Crypto exchanges lack circuit breakers, which automatically halt trading when prices drop too quickly, in contrast to traditional financial exchanges. The markets for cryptocurrencies fluctuate constantly, so steep drops are a possibility.
  • No undo for transactions Others misplaced or even merely forgot their wallet credentials, making it is estimated that millions of dollars of Bitcoin is completely unreachable.
  • Cryptocurrency exchanges do not have the same basic consumer protections offered in other financial products, like insurance in the case that a bank fails from the Federal Deposit Insurance Corp., or SIPC protection provided to investors if a brokerage fails.

What Do Financial Pros Say about Bitcoin? 

Bitcoin causes rifts. It is called the biggest fraud in history, but also one of the greatest financial innovations of the millennia. From both sides, these are thougths of experts.

Warren Buffett

Berkshire H. Q1 2019 Letter Warren Buffett, the famous investor and CEO of Berkshire Hathaway, is very against Bitcoin, and here is very obvious argument of why:

He believes it's no good. American farmland would be fine, as would apartment buildings that had useful functions and a positive cash flow, Buffett elaborated at the 2022 Berkshire Hathaway shareholder meeting. But he would only spend $25 to buy some Bitcoin, because he would not know what to do with it.

To the delight of the crowd, he said with a smile, "I have to sell it to y'all eventually." "It isn't gonna do anything."

Fidelity Investments

The US asset manager Fidelity, which is one of the few classic brokers that gives customers access to cryptocurrencies.

Fidelity Unveiled Fidelity Crypto in 2023– Ethereum & Bitcoin available for trading to Customers. Moreover, this is one of the fund managers that are authorized in U.S. by the US government. From SEC for Bitcoin spot ETF.

Fidelity released a report in October 2023 that stated Bitcoin is the "most secure, decentralized, sound digital money" and that it is "nothing like any other digital asset made before". Further, none of the other digital assets they evaluated are expected to supplant Bitcoin.

The authors of the report said: "It is not that we think an allocation to Bitcoin is risk free, but we think that some investors are overstating Bitcoin downside risk as compared to other digital assets.

Michael Novogratz

Michael is a Goldman Sachs banker who spent 11 years with Goldman (joining as partner in 1998) and also once served as the president of Fortress Investment Group.

He also worked the founder as CEO of Galaxy Digital, a cryptocurrency investment firm, and was a member of the Investment Advisory Committee on Financial Markets of the New York Federal Reserve.

Even as recently as December 2023, Novogratz, a long-time BTC advocate, claimed in an interview with Bloomberg TV that the cryptoasset could hit previous all-time highs and correctly predicted the SEC would approve a spot BTC ETF.

He said, "You know what, there's a lot of positive things happening to Bitcoin.

What Kind of Investment is Bitcoin?

Over a decade since its going live, no one has definitively started to answer the question—an investment of what? Owning Bitcoin is not owning company stock. Bitcoin The Business: Unlike a business, Bitcoin does not earn money from selling goods and services.

It pays out no dividends. The protocol also has no CEO, board of directors, or other central authority that sets and is accountable for delegation.

In June 2022, SEC Chair Gary Gensler told CNBC, "Some of these tokens are a commodity but others are — at least in my view — operating like a security."

Milk, grain, and metal are some basic raw materials that are referred to as commodities. The Commodity Futures Trading Commission, which also regulates foreign exchange trading and other markets, is the government agency that seems to have the best chance of effectively regulating cryptocurrencies.

There are those that say it works like money that can be spent on stuff and services. Most companies do not accept BitCoin.

It could, alternatively, be a whole new asset class.

Bitcoin and Volatility

Bitcoin, however, did not experience its growth linearly, and the ability to stay on top of the league table of the most expensive cryptocurrencies can disguise this fact.

The advantages of buying Bitcoin at the price of 1 cent in 2010 is clear. But volatility also has huge disadvantages. A Bitcoin-compatible browser called Coinbase Browser has been released for use on Android. It is available in the Google Play store from today. In 2021 and 2022, the drop reached more than 50%, while the slowdown in 2018 continued for about a year.

As an investor in Bitcoin you are always hopeful but prepared for the worst – the worst being massive shocks in its value. Bitcoin has often risen, however it is certainly possible for it to crash to zero value — for example, servers to multiple cryptocurrency platforms may collapse and enable a global sell-off.

Conclusion

Lastly, how much Bitcoin is worth investing in for 2024 is partly an indication of its past performance, the present state of the market, and main citizensauce predictions. It has seen outstanding growth and seems to be hitting new highs soon, but it remains very volatile and comes with regulatory risks.

Bitcoin investing should be conducted with a high appetite for risk, adequate diversification of the portfolio, and a watchful eye on market trends. The volatility is why whether Bitcoin constitutes a good investment depends on an individual level of risk appetite.

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