Interpreting the reluctance to invest in crypto often centers on cost, with Bitcoin sticker shock being a prominent factor. Picture this: You’re ready to dip into Bitcoin, only to find its price soaring above $70,000, instantly deterring you.
Yet, this perspective is myopic. You needn’t purchase a whole Bitcoin; fractional shares are accessible, with platforms allowing trades as low as $1. With today’s prices, even a minuscule investment can grant you ownership of 0.00001 of a Bitcoin.
Comparing Bitcoin to buying a Tesla Cybertruck highlights the disparity. While both may cost similarly, driving off with a fractional Tesla is inconceivable.
Alternatively, reducing Bitcoin ownership costs is feasible. Spot Bitcoin ETFs offer exposure to Bitcoin’s performance, with popular options like the iShares Bitcoin Trust and Fidelity Wise Origin Bitcoin Trust priced below $70. If Bitcoin sticker shock looms, the comparatively lower entry of these ETFs could overcome the psychological barrier of Bitcoin’s high price.
Assessing Bitcoin’s Worth: Overpriced or Underpriced?
Debating whether Bitcoin is overvalued or undervalued prompts diverse viewpoints. Some view it as overpriced, especially after its recent surge to a record high of $73,750 in mid-March. They anticipate a pullback to secure Bitcoin at a discounted rate.
While buying the dip is a sound strategy, many may doubt its viability. They might perceive it as too late to invest in Bitcoin, considering its remarkable journey from $1 to $70,000 over the past decade, leading to skepticism about its future growth potential.
Contrary to this skepticism, Wall Street’s prevailing sentiment is optimistic. Projections suggest Bitcoin reaching $100,000 by 2024 and $150,000 by 2025. Cathie Wood of Ark Invest even envisions Bitcoin soaring to $3.8 million by 2030, hinting at a potential 50-fold return on investment. Thus, rather than being overvalued, Bitcoin may be undervalued at its current price, presenting an enticing opportunity for investors.
Let Go of Bargain Cryptos
The true downside to arguing that Bitcoin is overvalued is that it often steers individuals towards investing in extremely inexpensive meme coins. Despite a few exceptions, many of these meme coins are traded at significantly less than $1. Take Shiba Inu (SHIB -3.19%), for instance, which trades at an astonishingly low price of only $0.00003.
However, does anyone genuinely believe that Shiba Inu offers a superior investment opportunity compared to Bitcoin? Does anyone truly think that hoarding dog-themed meme coins is a wiser long-term strategy than acquiring fractional shares of Bitcoin? If the answer is “yes,” then I have a straightforward response: You get what you pay for.
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