The 1 cryptocurrency I would buy right now

After a terrible 2022, when the overall cryptocurrency market lost about two-thirds of its value, investors are starting to warm up to the industry again. This is a surprising turn of events, given the series of major explosions that occurred last year with certain crypto companies that should have completely damaged confidence in the digital asset market.

The bullish tone is welcome news too cryptocurrency investors who want to put money to work in the volatile industry. Without a doubt, among the more than 22,000 different digital resources out there, Bitcoin (BTC 0.87%) is the one I wanted buy right now without hesitating. Here’s why.

A strong start to 2023

Since hitting an all-time high of nearly $69,000 per coin in November 2021, Bitcoin cratered last year, down 65% in 2022. Aggressive interest rate hikes by the Federal Reserve, set in motion to curb soaring inflation, certainly helped turn investor sentiment from positive to negative. This also negatively impacted many growth technology stocks, as speculative assets were hammered.

But as inflation, as measured by the widely followed consumer price index, continues to show signs of cooling, sentiment appears to have shifted back to optimism. The entire cryptocurrency market increased by 34% in value in January, with Bitcoin rising 37% in the month. Perhaps investors expect the Federal Reserve to return to a more accommodative stance sooner rather than later.

Of course, it is obvious that Bitcoin’s price movements in the short term are heavily influenced by changes in monetary policy. So trying to predict what will happen next is virtually impossible. What I find encouraging is the renewed optimism surrounding Bitcoin right now. This will help to increase interest in the world’s best cryptocurrencywhich could support a continued bull run in 2023.

A legitimate financial asset

In addition to recent positive momentum, Bitcoin is well on its way – if not there already — to become a legitimate financial asset. There are different ways to gain access. For example, investors can buy Bitcoin through Blockits cash app, Coin baseor Robinhood Markets. In addition, there are a number of exchange-traded funds on the market that help make it easier to gain exposure to Bitcoin.

Individual investors can get signals to buy this digital asset from some well-known capital allocators. Famous tech investor Cathie Wood is extremely bullish on Bitcoin. Bill Miller, one of the most successful value investors ever, recently said that Bitcoin is one of his most important personal holdings.

Then there is the regulatory landscape to think about. A state senator from Arizona recently pushed through a bill to make Bitcoin legal tender in the state, similar to what happened in El Salvador late in 2021. It is anyone’s guess whether this will pass and become law, but it shows that progress is being made with the work to legitimize Bitcoin.

An important catalyst

At a high level, Bitcoin allows two unrelated parties to send and receive value to each other directly without a central intermediary. This is without a doubt a ground-breaking innovation. However, I believe Bitcoin’s most important feature is its absolute scarcity. Only 21 million coins will ever be mined and this is something that will not change.

About every four years, the Bitcoin network undergoes something called a “halving,” when the block rewards that miners receive are cut in half. In the run up to this event, Bitcoin has historically started to trend upwards. The last halving occurred in May 2020, and the next is expected to occur in March 2024.

While we shouldn’t just blindly assume that Bitcoin’s future price trajectory will match exactly what happened in the past, the event will still shine a spotlight on Bitcoin’s fixed supply cap. And this alone could drive higher demand from investors who want a piece of an asset that isn’t subject to inflationary pressures like the US dollar is.

This favorable feature is reason enough to invest even a small bit of your hard-earned savings in Bitcoin.