Is Bitcoin the Safest Crypto to Own Right Now?

Bitcoin (CRYPTO: BTC), the world's most valuable cryptocurrency with a market cap of $1.3 trillion, is often considered the safest digital token to own. But over the past 12 months, it's lost nearly 40% of its value amid fears of interest rate hikes and other macro headwinds. Is it still a safe cryptocurrency to buy, or should investors stick with more stable assets?

Why is Bitcoin considered a safe-haven asset?

Bitcoin is mined using the energy-intensive proof-of-work (PoW) consensus mechanism. Its miners use powerful computer chips to solve cryptographic puzzles and earn the tokens as rewards. More than 20 million of its maximum supply of 21 million tokens have already been mined, and it becomes increasingly difficult to mine every four years with a scheduled "halving" that cuts its mining rewards in half. Its most recent halving occurred in 2024.

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That scarcity makes Bitcoin more comparable to gold than other cryptocurrencies. A growing number of institutional, corporate, and government investors are buying it as a hedge against inflation and expansionary monetary policies that devalue fiat currencies. The SEC also approved Bitcoin's first spot price ETFs in 2024, making it easier for retail and institutional investors to invest in the cryptocurrency without using crypto wallets.

But is Bitcoin the "safest" crypto to own right now?

As the world's most widely adopted cryptocurrency, Bitcoin is considered more stable than smaller altcoins. However, it's still declined alongside the broader crypto market over the past year, as macro headwinds drove investors toward more conservative investments. It also underperformed gold, which rallied more than 20% over the past 12 months.

Bitcoin's inability to keep pace with gold suggests that investors still consider it a speculative investment rather than a safe haven one. Nevertheless, Bitcoin maximalists like Strategy's (NASDAQ: MSTR) Michael Saylor -- who directed his company to become the world's largest corporate holder of Bitcoin -- expect it to soar much higher over the long term.

Saylor expects Bitcoin's price to rise from about $64,000 today to $21 million by 2046. Ark Invest's Cathie Wood expects its price to reach $1.25 million within the next five years.

We should take those rosy estimates with a grain of salt, but they suggest that institutional investors could ramp up their Bitcoin purchases as the U.S. dollar declines. It also might have a brighter future than smaller cryptocurrencies that can't be valued by their scarcity.

I wouldn't call Bitcoin a safe investment in this wobbly market. But it's still the safest blue chip token you can buy today -- as long as you can stomach a lot of near-term volatility.

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