Killing Bitcoin is easy (Cryptography: BTC) recently. After all, it fell by more than 20% from its all-time high of $109,000 in January. And because of the continued uncertainty of tariffs, it has failed to live up to the grand hype surrounding it earlier this year.
However, this may be your last chance to buy Bitcoin for under $100,000. Currently, two fundamental changes are being made in the global financial market, and Bitcoin is at the heart of both.
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The first major changes include investors’ perceptions of Bitcoin. Is it a bubble-filled, speculative digital asset? Is it a dangerous tech stock or is it completely different?
At the beginning of the year, Bitcoin acted like a speculative digital asset. Analysts quickly issued a $200,000 price forecast in January. At the time, cryptocurrency was trading for around $100,000, and looked like an obvious and easy candidate to double the value by the end of the year.
However, after new tariffs in Canada, Mexico and China were announced by President Donald Trump in late January, Bitcoin began to act much more like a high-risk tech stock. In other words, if tech stocks are one day devaluing, Bitcoin could also fall.
As a result, Bitcoin prices were very unstable and I was whipped every day. All new changes to the customs policy appeared at the prices of high-tech stocks, which meant that all new changes to the customs policy appeared at the prices of Bitcoin.
But something very interesting has happened since “The Day of Liberation” when Trump announced his tariff plans. Bitcoin prices have hardly changed. On April 2nd, it was trading for $85,000. Now, almost three weeks later, it’s still trading for around $85,000.
Image source: Getty Images.
That led to the development of a very interesting investment paper for Bitcoin. It could be a long-term reservoir of value. In other words, bitcoin enthusiasts have declared for years, so it could actually be digital gold.
Just as gold can provide hedge against economic uncertainty and inflation, so does Bitcoin due to its inherent rarity. This is a point that some top hedge fund managers have been doing for several months.
That type of thinking has begun to narrow it down to mainstream investment stories. The outflow from Spot Bitcoin Exchange Funds (ETFs) has begun to reverse and money is now flowing.
The story continues
There is another fundamental change now, including government support for Bitcoin as a country’s strategic asset. Just as the country stocks up oil and other goods, they are now starting to stockpile bitcoin.
Of course, the most obvious indication of this change was the creation of a strategic Bitcoin Reserve by the White House in March. Many US states, including Texas, Arizona and North Carolina, are also beginning to develop plans for their own Bitcoin Reserve at the state level.
As part of this new change of thinking, the first ever strategic Bitcoin Reserve Summit was held on April 15th. Panelists discussed topics such as the geopolitical implications of Bitcoin and the role cryptocurrencies may play in sorting the global financial system.
The concept of Bitcoin as a strategic asset is also beginning to resonate with other countries. Emerging markets, for example, are now caught up in the law and are launching their own Bitcoin Reserve plan. And some have suggested that if the US government starts to actively purchase Bitcoin, it could cause a “arms race” for Bitcoin with Russia or China.
Things become even more interesting when you consider that Boheins, executive director of the President’s Advisory Council on Digital Assets, recently proposed that new tariff revenues could be used to purchase Bitcoin. This is important. Because the US government is currently unable to purchase more Bitcoin unless it does “budget neutral” (i.e. no new taxes).
New tariff revenue may be able to meet the definition of “budget neutral.” In theory, some of the new revenue from tariffs will be sent to the US Treasury, which is responsible for strategic Bitcoin reserves, where Bitcoin can be purchased in the spot market.
Even if we dismiss the new strategic Bitcoin reserve as hype and intense, it is impossible to ignore the fact that there is a lot of debate happening right now about how Bitcoin can help the US government achieve its strategic goals. If Bitcoin begins to follow the upward trajectory of gold this year, Bitcoin could soar as high as $150,000 by the end of the year.
Yes, I think you should consider buying Bitcoin under $100,000. The White House is unlikely to give up on Bitcoin, and you shouldn’t.
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Dominic Basulto has a position in Bitcoin. Motley Fool has a position and recommends Bitcoin. Motley Fools have a disclosure policy.
Do I need to buy Bitcoin for less than $100,000? Originally published by The Motley Fool
