Could Buying Bitcoin Today Still Set You Up for Life?

The cryptocurrency market is a relatively new asset class. And the fact that it might not have proven itself yet can discourage certain market participants from even taking a look. However, the early adopters, those who were willing to take a risk, are sitting on life-changing gains.

Bitcoin (CRYPTO: BTC) is the poster child of the crypto movement, accounting for 59% of the entire industry's value. Its price has risen almost 17,000% in the past 10 years (as of April 9). This monster return turned a hypothetical $10,000 starting sum into nearly $1.7 million today.

The world's first and most valuable cryptocurrency made some investors very wealthy. But could buying Bitcoin today still set you up for life?

Image source: Getty Images.

Fishing in the right waters

There are so many cryptocurrencies out there that it can make investors' heads spin. Of all the options, I think Bitcoin should be the top choice for long-term investor portfolios. There are three standout reasons that make it a superior digital asset.

An often-overlooked feature is that Bitcoin isn't controlled by any single entity. This setup stays true to the underlying philosophy of cryptocurrencies, which is to give power back to the community. In this instance, Bitcoin aims to separate money from government influence, which is precisely why it needs to be decentralized.

Ethereum is a popular cryptocurrency that competes with Bitcoin for attention and capital. It's essentially like a start-up that has a governing body calling the shots. This introduces single points of failure, less anti-fragility, and censorship if users don't follow rules.

Additionally, Bitcoin's architecture is incredibly simple, especially compared to other more functional cryptocurrencies. This is purely by design. As a slow-moving blockchain network, with upgrades that must be approved via consensus, Bitcoin doesn't introduce significant technical risk that could expose software vulnerabilities.

And maybe most importantly, Bitcoin is scarce. There is a hard supply cap of 21 million units, which will be the maximum number in circulation. This supports the argument that it should be able to attract more capital over time, as it tries to be a top digital store of value.

Bitcoin operates with a predictable inflation schedule, which backs its scarcity, which is enforced by a halving event that occurs roughly every four years. Since the first block was produced in January 2009, Bitcoin has operated without any hiccups, staying true to its original premise.

Patience and discipline will be rewarded

Every investor has different goals. Some want to hit home runs. Others want steady performance.

Therefore, a potential return that sets one person up for life might not do the same for someone else who has an even bigger target in mind. This makes it difficult to come to a general conclusion about the impact Bitcoin's long-term upside can have on any individual. What matters at the end of the day is that the market is giving investors a fantastic opportunity right now to buy a winning asset, which is down 43% from its peak, that still has incredible potential over the next several decades.

Bitcoin's $1.5 trillion market cap is extremely tiny in terms of total wealth on the global stage. River Financial, a Bitcoin financial services firm, estimates that Bitcoin today represents 0.2% of worldwide wealth. Decades into the future, it's not unreasonable to believe that the digital asset will command a much larger share, given the favorable properties above that are attractive for pools of capital and in transactional settings.

Looking ahead, there's no doubt that Bitcoin will continue to experience meaningful bear markets. This is where patience and discipline come into play. Only those investors who can stay the course will be rewarded. I believe that Bitcoin can indeed set investors up for life, provided that you're able to make a larger upfront investment and dollar-cost average over time.

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.