Bitcoin Has Been My Favorite Cryptocurrency to Buy So Far in 2025. Here's Why.

Admittedly, there's cause for concern if you're thinking about buying Bitcoin (CRYPTO: BTC) right now. Bitcoin has dipped below the psychologically important $100,000 price point, and at one point in January, it even fell below $90,000.

However, now is the time to buy Bitcoin at a discounted price before it once again skyrockets in value. Here are three big reasons why you should be adding Bitcoin to your portfolio right now.

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Short-term vs. long-term outlook for Bitcoin

If you're a short-term investor, yes, the current situation appears fraught with risk. Bitcoin is only up a modest 2% for the year and has struggled to hold the line at $100,000. At this pace, there's absolutely no way that Bitcoin is going to double in price this year, as many predicted at the outset of 2025.

Even worse, every single bit of incoming macroeconomic news seems to knock Bitcoin lower. The world's top cryptocurrency has been remarkably fragile when it comes to inflation, tariffs, and any news related to monetary or fiscal policy. That shouldn't be happening because, historically, Bitcoin has been completely uncorrelated with every major asset class.

Image source: Getty Images.

But here's the thing: Bitcoin continues to outperform the crypto market as a whole. Just look at how badly other cryptos are faring right now. Ethereum is down 20% for the year. Solana is down 16% for the year. And highly speculative meme coins such as Dogecoin and Shiba Inu are both down 30% for the year.

Best of all, the long-term outlook for Bitcoin remains unchanged. Cathie Wood of Ark Invest recently doubled down on her $1.5 million price forecast for Bitcoin. She expects Bitcoin to hit that price by the year 2030. She points to the growing integration of Bitcoin into the global financial system, the success of the spot Bitcoin ETFs, and the sound network fundamentals of the Bitcoin blockchain.

Big institutions are buying Bitcoin

There's further room for optimism because large institutional investors are now expanding their commitment to Bitcoin. As they see it, Bitcoin represents an entirely new asset class with its own unique risk-reward profile, and they are looking to add it to their overall portfolio mix. According to BlackRock, the company behind the highly successful iShares Bitcoin Trust (NASDAQ: IBIT), institutions should be allocating 2% of their portfolios to Bitcoin these days.

It looks like many institutions are following this advice. According to recent 13F filings with the SEC, large institutional inventors (those with over $100 million in assets under management) tripled their overall exposure to Bitcoin in the fourth quarter of 2024. As Coinbase Global points out, over 1,000 of these large institutional investors now have exposure to Bitcoin via the new spot Bitcoin ETFs.

That number is likely to soar in the coming years as pension funds and other risk-averse institutional investors become more comfortable with Bitcoin. Moreover, only a smattering of the very largest institutional investors -- the sovereign wealth funds -- have bought into Bitcoin. However, more are coming. In Q4 2024, for example, an Abu Dhabi sovereign wealth fund started to buy Bitcoin for the first time ever.

Is a strategic Bitcoin reserve coming?

I've saved the best for last: There's approximately a 50/50 chance that the U.S. government will create a strategic Bitcoin reserve by the end of the year. If that happens, then the price of Bitcoin could skyrocket. That's because the U.S. government could buy as many as 1 million Bitcoins over the next five years in order to build this reserve. That's 5% of the total circulating supply of Bitcoin and would easily make the U.S. a Bitcoin superpower.

Worldwide, a number of sovereign nations have also announced their plans to start buying Bitcoin. It's easy to see how a steady stream of Bitcoin buying from countries such as Brazil could become a torrent if an economic superpower like China decides to enter the fray. Some analysts have even hypothesized that the U.S. and China might get into a "Bitcoin arms race," as both nations race to accumulate as much Bitcoin as possible.

Keep your eye on the big picture

So ignore the daily drip-drip-drip of bad macroeconomic news. Stop worrying about Bitcoin struggling to hold onto that $100,000 price level. Instead, focus on the long-term outlook for Bitcoin.

It might not soar in value during the first quarter of this year, but by the end of 2025, I'm highly confident that Bitcoin will once again have turned in the same type of triple-digit performance that it did in both 2023 and 2024.

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

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Dominic Basulto has positions in Bitcoin, Ethereum, and Solana. The Motley Fool has positions in and recommends Bitcoin, Coinbase Global, Ethereum, and Solana. The Motley Fool has a disclosure policy.