3 Reasons Bitcoin Is a Must-Buy for Long-Term Investors

Bitcoin (CRYPTO: BTC) has had a phenomenal year, winning over investors from individuals all the way to institutions and even the incoming president. The top crypto has surged 122% in 2024 (as of Dec. 30), as it once again crushed the performance of the stock market.

As we set our sights on 2025 and beyond, you are probably wondering if adding this digital asset to your portfolio is smart, particularly as it trades 12% off its peak from mid-December. I think it's worthwhile to remain bullish.

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Here are three reasons Bitcoin is a must-buy for long-term investors.

1. It's legitimate

It's very hard to argue against the view that Bitcoin has become a legitimate financial asset now. This is the first factor that should compel investors to buy it.

As of this writing, the cryptocurrency's market cap sits at a notable $1.9 trillion. This is a far cry from its start in 2009, when it was viewed as a silly form of internet money that only caught the attention of cypherpunks interested in prioritizing privacy and challenging financial institutions. Its current value rivals some of the world's most dominant tech enterprises.

In January 2024, the Securities and Exchange Commission approved spot Bitcoin exchange-traded funds (ETFs) for the first time. This created a convenient, liquid, and regulatory-compliant method for larger pools of capital to start buying. And it essentially gave the crypto recognition from policymakers in Washington and asset managers on Wall Street.

President-elect Donald Trump has also publicly voiced his support. He was the keynote speaker at the Bitcoin Conference in Nashville, Tennessee, in July. During his speech, he said he would like to create a strategic Bitcoin reserve in the U.S.

The digital token has gotten to a point where it can no longer be ignored. It has bounced back from major drawdowns only to become stronger than before. And it appears it isn't going anywhere.

2. It's digital

Another reason Bitcoin makes sense as a portfolio addition for long-term investors is that it's digital in nature. At a high level, it is simply a massive decentralized database and communications protocol. Being digital means that it transcends borders. It's portable, divisible, and transactable, particularly when compared to physical gold.

In the past two decades, the world has become increasingly digital. The rise of the internet, smartphones, and various applications is a trend too hard to ignore that has shaped our economy.

As we look to the future, it's almost impossible to believe that the world won't continue on this path, becoming even more digital, tech-enabled, and data-driven. This is especially true if you think artificial intelligence (AI) is going to play a bigger part in our lives.

"The internet will have a native currency; it's just a matter of time," Block CEO Jack Dorsey wrote in his company's first-quarter 2024 shareholder letter. "Artificial Intelligence systems and agents will have to transact, and the most efficient way to do so will be a common protocol for money movement."

Against this backdrop, it makes sense that Bitcoin, as a fully decentralized and digital method of transferring value to others, should continue rising in value.

3. It's scarce

The final and perhaps more important reason long-term investors should buy Bitcoin is because of its scarcity. Thanks to the blockchain network's halving schedule and set inflation rate, there will only ever be 21 million coins in circulation.

This contrasts greatly with the current monetary system, in which massive debt burdens, excessive money printing, and ongoing inflation have become normalized. As citizens worldwide see their countries' fiat currencies constantly being debased, it's not surprising to realize that they would want to own something that is absolutely scarce like Bitcoin, an asset that isn't controlled by a single entity.

Bitcoin has had a tremendous run in the past 15 or so years. While future returns certainly won't resemble historical gains, the returns can still be game-changing. Long-term investors should still consider buying the world's top cryptocurrency.

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