It’s easy for cryptocurrency investors to be depressed bitcoin (CRYPT: BTC) right now. The world’s most popular cryptocurrency is down almost 50% from its all-time high of $126,000 recorded just a few months ago.
To add insult to injury, the price of gold continues to skyrocket, leading many to question the digital gold investment thesis for Bitcoin. But I’m going to take a contrarian stance right now and predict that cryptocurrencies will change things soon. It’s still a buy, and here’s why.
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It’s true that gold is having its moment right now. It is up more than 70% over the last 12 months and recently traded above $5,000 an ounce. That’s heady stuff.
But cryptocurrency investors still think the leading digital currency will outperform gold over the next 10 years. At a recent cryptocurrency industry event in New York, Dan Morehead, CEO of cryptocurrency-focused investment firm Pantera Capital, suggested that Bitcoin will “massively outperform” gold over the next decade. As the US dollar continues to weaken over time, investors will gravitate towards Bitcoin, given its scarcity of only 21 million coins.
Even better, many crypto analysts think that Bitcoin’s infamous four-year boom and bust cycle is a relic of the past. Growing institutional adoption, combined with a pro-cryptocurrency regulatory agenda from the Trump administration, should help reduce the risk of a prolonged recession. Some even think that Bitcoin is heading into an economic supercycle, which will lead to much higher prices over the next decade.
Still, it is difficult to ignore that the price of the digital currency tends to collapse every four years. That was the case in 2014, 2018 and 2022. So will the same pattern follow in 2026? The hope is that even if Bitcoin has to fall further this year, it will soon return to form, just as it has in every other boom and bust cycle.
There are several different ways to think about institutional adoption. In its simplest form, it refers to large institutional investors stocking up on cryptocurrencies through the new Bitcoin exchange-traded funds, as they seek to gain access to an entirely new asset class.
That’s something that just isn’t going away anytime soon. Perhaps the most risk-averse institutional investors keep their asset allocations at 1% or less. But the growing consensus is that these allocations will increase over time, potentially reaching 3% or more in the coming years. If that is the case, then the price of Bitcoin has no choice but to rise.