Does This 1 Trend Mean That It's Too Late to Buy Bitcoin?

Key Points

• Bitcoin is a mainstream asset now.

• Mainstream assets tend to be less volatile and exhibit lower returns.

• That doesn't mean the coin's best days are behind it.

• 10 stocks we like better than Bitcoin ›

The more an asset matures, the less it acts like a lottery ticket -- for better and for worse. For most investors, who prefer compounding to coin flips, it's a good change. The catch with Bitcoin (CRYPTO: BTC) is that its spectacular past gains are easy to remember, and they have set expectations unrealistically high.

There's some solid evidence suggesting the coin's returns are compressing over time. But does that mean it's too late to buy it for the purpose of long-term holding?

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Image source: Getty Images.

Multiple compression is real

Based on information compiled by BitBo, a cryptocurrency data service, with each four-year halving era, Bitcoin's returns -- as measured by the multiple that investors earned from an investment based on historical data -- have declined significantly. The broad takeaway is that later halving eras have lower peak multiples than the wild early years.

That's exactly the maturing-asset pattern one would expect to see. And it suggests that the chances of Bitcoin's future returns beating its past returns are declining.

The mechanism that delineates those eras -- the halving -- has not changed. Roughly every four years, the mining issuance subsidy halves, cutting new supply in half. After the 2024 halving, new issuance dropped from about 900 coins per day to roughly 450, which is a shift that persists regardless of short-term sentiment.

Meanwhile, the float available to be bought continues to tighten over time. The share already mined is high and rising, and the remaining pie shrinks with each block mined. Scarcity is a core part of the coin's design.

What has changed materially is the degree of integration that the asset has with the traditional financial sector. U.S. spot exchange-traded funds (ETFs), approved in early 2024, turned Bitcoin into a button-click purchase for retirement and wealth accounts.

ETF activity now represents a significant share of all spot trading activity. ETFs thus represent an entire population of buyers, holders -- and yes, potential sellers -- that simply did not exist before the last couple of years.

Put differently, the variability of Bitcoin's returns may compress, along with its volatility, but it still has an immutable 21 million cap in the number of coins that can exist. That simple constraint is why its investment thesis survived several of its halving cycles, and why today's larger, more regulated buyer base does not negate the long-term thesis for buying and holding it.

Lower multiples are not the same as bad returns

Bitcoin's returns likely continuing to compress does not imply poor forward returns. It implies more normal ones. With that being said, the asset can and probably will continue to outperform.

In practical terms, if Bitcoin compounds at rates typical of scarce, widely held assets rather than moonshot start-ups, investors can still see meaningful gains across a full halving cycle.

Assume a more modest path where the coin doubles over roughly four years. That equates to a compound annual growth rate near 19%, a far cry from a 1,000 multiple, yet an outstanding result for a core holding in a diversified portfolio.

That level of compounding is plausible if issuance remains at 450 coins per day, ETFs continue to see recurring inflows that exceed issuance significantly, and macro conditions are not persistently hostile.

Even late buyers in past halving cycles often ended up with positive outcomes after sitting through a full era, provided they held through volatility. The exact path differs, but the scarcity plus incremental mainstreaming has repeatedly bailed out patient investors.

And those who hold it for longer than that will likely see larger gains. Buying it now means starting the clock on the compounding process, even if the compounding is occurring slower than before.

So, in sum, it isn't too late to buy Bitcoin, though it makes sense to keep your expectations reasonable.

Size your position so that you can use dollar-cost averaging through drawdowns without flinching or getting emotional, set a minimum holding horizon of at least four years, and then sit back. If returns keep compressing, and they probably will, you will not own a lottery ticket.

You will own a scarce digital asset with institutional rails attached, and a credible path to compounding -- so appreciate it, because there aren't too many other investments like it.

Should you invest $1,000 in Bitcoin right now?

Before you buy stock in Bitcoin, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Bitcoin wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $670,781!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,023,752!*

Now, it’s worth noting Stock Advisor’s total average return is 1,052% — a market-crushing outperformance compared to 185% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 25, 2025

Alex Carchidi has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.