Is It Too Late To Buy Bitcoin?
As Bitcoin marches towards the $70,000 mark, many people ask whether it is too late to buy the cryptocurrency. Crypto enthusiasts, assuming they are already late to the party, are also commonly seen searching for the next BTC.
But there are voices who say: it's never too late to buy Bitcoin. Since its launch in 2009 by the pseudonymous Satoshi Nakamoto, BTC has dominated the cryptocurrency market, with none of its competitors managing to claim its first position. As of July 26, 2024, Bitcoin dominance stands at 55.4%, with the digital asset accounting for $1.33 trillion of the $2.4 trillion crypto market capitalisation.
As the first blockchain-based cryptocurrency and the largest by market cap, Bitcoin has provided investors with a significant return on investment (ROI) over the years. In the last bull market alone, the BTC price surged nearly 1,200% between March 13, 2020 and November 11, 2021. Moreover, in addition to functioning as a medium of exchange, Bitcoin's deflationary halving mechanism has made it an attractive choice among investors as a store of value.
In what follows, we will take a look at Bitcoin's adoption and market performance, major technological innovations, current developments, and future projections by prominent industry participants.
An Overview of Bitcoin's Adoption and Market Performance
Bitcoin's adoption has grown significantly over the years. According to a Crypto.com study, BTC ownership increased by 33%, from 222 million to 296 million, between January and December 2023. Interestingly, in the report, Bitcoin owners accounted for 51% of global cryptocurrency owners. In contrast, Ethereum (ETH) holders only had a 21% share.
As US spot BTC exchange-traded funds (ETFs) see record inflows at $533.5 million on July 22, 2024, the Bitcoin network's hashrate has recently reached an all-time high at 659 EH/s. Moreover, despite a drop from the highs of 2021, grassroots digital asset adoption multiplied between Q3 2020 and Q2 2023 based on Chainalysis' data. Simultaneously, River's report indicates surging BTC payments activity with an estimated 1,212% growth from August 2021 to August 2023 in routed transactions in the Layer 2 Lightning Network, which operates on top of the Bitcoin blockchain.
In terms of price action, Bitcoin has one of the greatest all-time ROIs among financial assets. Since July 14, 2010, its value has grown by a whopping 115,663,586% – from $0.05816 to $67,270. Here's how much Bitcoin's price has surged during each historical bull market:
+7,205% between January 15 and December 3, 2013.
+3,900% between April 1, 2016 and December 21, 2017
+1,195% between March 13, 2020 and November 11, 2021
Despite its ROI becoming less "pronounced" over the years, BTC has provided excellent returns for investors during each historical bull run.
Technological Innovations: Upgrading the BTC Network
In the table below, we have collected the Bitcoin network's most important hard forks, protocol upgrades, and other technological innovations:
| Tech Innovation | Details |
|---|---|
| SegWit | Implemented as a soft fork in August 2017, Segregated Witness (SegWit) is among the most important Bitcoin protocol upgrades. By reorganising block data to segregate the signatures (witnesses) from transaction data, it allowed more transactions to be stored in a single block, increasing BTC's throughput. At the time, the upgrade sparked a heated debate in the Bitcoin community, resulting in the Bitcoin Cash (BCH) hard fork that split the chain into two. |
| Taproot | Launched in November 2021, Taproot is also a soft fork that enhanced Bitcoin transactions' privacy, increased efficiency, decreased fees, and improved the network's capabilities to process smart contracts. By changing BTC's signature algorithm from the Elliptic Curve Digital Signature Algorithm (ECDSA) to Schnorr signatures and other improvements, the Taproot upgrade paved the way for Ordinals. |
| Ordinals | Launched in January 2023, Bitcoin Ordinals is a protocol that introduced new ways to create non-fungible tokens (NFTs) on top of the BTC blockchain. As a result, users gained the ability to attach information like images, videos, and other data to individual satoshis in the form of inscriptions, creating NFTs. With over 68 million cumulative inscriptions to date, Ordinals has made Bitcoin a top blockchain for non-fungibles. |
| Runes | Introduced by the same Casey Rodarmor who created Ordinals, Runes Protocol enabled seamless and efficient native token issuance on top of the Bitcoin blockchain with minimal on-chain footprint. For some days, Runes' launch fuelled a significant increase in BTC transaction fees due to the protocol's sudden popularity and other factors. |
Current Bitcoin Developments to Watch Out for in 2024
In addition to technological upgrades, there have been quite some developments going on for Bitcoin in its broader ecosystem in the past few months. These include:
The approval of spot Bitcoin ETFs in the US in January 2024, Hong Kong in April 2024, as well as Thailand and Australia in June 2024. Additionally, spot BTC exchange-traded products (ETPs) launched in the UK in May 2024. Earlier, Europe's first spot Bitcoin ETF was introduced on Euronext Amsterdam in August 2023 and in Canada in February 2021.
The Bitcoin mining industry is currently responding to the impacts of the latest BTC halving. By decreasing block rewards by 50%, this year's halving caused a significant revenue loss for miners. However, as the next Bitcoin bull run is imminent, miners are in the green again, with the BTC hashrate increasing to an all-time high in May.
Upcoming presidential elections in the United States play a crucial role in the US government's policy towards Bitcoin and cryptocurrency in general. While both Former President Donald Trump and Presidential Candidate Robert F. Kennedy seem to have taken a pro-crypto stance, Vice President Kamala Harris has not yet shared her views on digital assets.
Bitcoin's adoption as a legal tender has always been a hot topic within the industry. After El Salvador's move in September 2021, there has been quite some speculation about countries following in the Latin American nation's footsteps. Eventually, the Central African Republic made BTC a legal tender in April 2022 just to reverse its decision a year later.
Financial institutions seek to offer crypto custody services in the US and abroad. While German federal bank LBBW has teamed up with Bitpanda to provide cryptocurrency custody to its corporate clients in April 2024, financial institutions in the United States are pushing regulators to change their guidance on digital assets so they can enter the market more seamlessly. Moreover, the SEC's approval of spot BTC ETFs could pave the way for Bitcoin-based retirement savings vehicles in the US.
Future Bitcoin Price Projections
Now, the question: how far will Bitcoin's price go in the following years? Here are the projections of prominent industry participants:
Hal Finney: On January 10, 2009, a few days after Bitcoin's launch, US software developer Hal Finney predicted BTC would reach $10 million in the future.
Jack Mallers: In May 2024, Strike CEO Jack Mallers stated that Bitcoin's price would surge to between $250,000 and $1 million in the "next 10 to 18 months."
Balaji Srinivasan: Tech mogul Balaji Srinivasan made a bet in March 2023 that Bitcoin's price would reach $1 million within 90 days. Later on, he conceded his bet and burnt $1 million of BTC.
Samson Mow: Recently, Bitcoin maximalist Samson Mow has doubled down on his forecast that BTC's value would rise to $1 million "if not next year, then very soon."
Michael Saylor: In June, MicroStrategy chairman Michael Saylor predicted Bitcoin's price to increase to as high as $8 million in a speech at the BTC Prague event.
Buy Bitcoin on VALR
No matter when you decide to get hold of some BTC, Bitcoin is here to stay. As the top cryptocurrency by market capitalisation, it continues to dominate the industry.
While we don't know whether BTC will reach $1 million, $8 million, $10 million, or another price, there are relevant voices who would say there is a favorable future outlook, especially if we consider its past technological innovations and current ecosystem developments.
Looking to gain exposure to Bitcoin? Get started on VALR!
Frequently Asked Questions
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The decision to buy Bitcoin depends on individual investment goals and market conditions. While some believe it's never too late to buy Bitcoin due to its long-term potential and historical performance, others suggest analyzing market trends and doing thorough research before making a purchase.
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Bitcoin has historically provided significant returns on investment and is considered a store of value by many investors due to its deflationary nature and increasing adoption. However, it's important to consider the risks and volatility associated with cryptocurrency investments.
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No, it is not illegal to buy Bitcoin in South Africa. South Africans can legally buy, sell, and use Bitcoin and other cryptocurrencies.
Risk Disclosure
Trading or investing in crypto assets is risky and may result in the loss of capital as the value may fluctuate.
VALR (Pty) Ltd is a licensed financial services provider (FSP #53308).
Futures trading is provided by VALR DAM Pty Ltd as a Juristic Representative of CAEP Asset Managers Pty Ltd (FSP number: 33933) an authorised financial services provider.
Disclaimer: Views expressed in this article are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.
