Amid all the uncertainty and volatility surrounding global tariffs, it’s understandable why many investors may be planning to steer clear of crypto right now. After all, cryptocurrencies — just like stocks — are down across the board, with some of them down as much as 50% for the year.
But there’s one cryptocurrency you might want to think about buying now and holding forever, and that’s Bitcoin(CRYPTO: BTC). Here’s why.
Perhaps the biggest factor in Bitcoin’s favor is its remarkable resilience. During the past 15 years, it has undergone several boom-and-bust cycles, and it is famous for its volatility. But here’s the thing — after every major decline, Bitcoin has bounced back, reaching new highs.
So, even if you think that Bitcoin is headed for a stinker of a year in 2025, it’s worth looking back at previous market cycles, to see just how quickly Bitcoin ultimately rebounded. The three key years to consider are 2014 (when Bitcoin fell by 57%), 2018 (when Bitcoin plummeted by 74%), and 2022 (when Bitcoin sank by 64%).
After every one of those epic collapses, Bitcoin went on to hit another record high. Take, for example, the last Bitcoin market cycle. Bitcoin reached a high of $69,000 in November 2021 before ultimately sinking below $16,000 in November 2022. But Bitcoin took off from there, posting triple-digit percentage returns in both 2023 and 2024, before hitting a brand-new all-time high of $109,000 in January.
Historical performance is no guarantee of future results. But the historical record suggests that Bitcoin has the ability to bounce back from any major retreat. So if tariff uncertainty has you on tenterhooks, this might provide some peace of mind.
In 2024, WisdomTree(NYSE: WT) published a comprehensive report analyzing Bitcoin’s performance relative to eight asset classes. It looked at the period between 2012 and 2023, to see how Bitcoin stacked up against equities, bonds, commodities, and gold.
What it found was astounding: In nine of those 12 years, Bitcoin was easily the top-performing asset in the world, and it wasn’t even close. But in the other three years (2014, 2018, and 2022), Bitcoin was the worst-performing asset in the world, and it wasn’t even close.
If Bitcoin were a race car driver, it would be Ricky Bobby, the character played by Will Ferrell in the comedy Talladega Nights. His motto was, “If you ain’t first, you’re last.” It summarized his reckless, do-anything-to-win mentality. Sometimes, it leads to winning the race; other times, it leads to spinning out, wrecking, and not being able to finish the race.
Image source: Getty Images.
Still, you definitely need to be comfortable with Bitcoin’s volatility. In most years, you might come in first. But, in the others, you need to be ready to accept some stomach-churning losses.
Right now, it’s looking like 2025 is shaping up to be one of those stomach-churning years. Bitcoin is down nearly 25% from the all-time high of $109,000 in January, and shows few signs of turning around anytime soon.
It’s important to keep a long-term investment mindset when it comes to Bitcoin. According to Cathie Wood of Ark Invest, you should be willing to hold your Bitcoin for several years to optimize your gains. If you’re simply viewing Bitcoin as a short-term momentum play, you’re doing it all wrong.
In Ark Invest’s “Big Ideas 2024” report, Wood clearly laid out how Bitcoin has outperformed every major asset class over long time horizons. Over a seven-year time period, Bitcoin’s average annualized return was 44%. Other major asset classes averaged just 5.7%.
Moreover, Bitcoin’s performance improved the longer you held it. So, for example, an investor who held Bitcoin for the full seven years could expect an average annualized return of about 70%, while an investor who held Bitcoin for just four years could expect an average annualized return of about 55%.
The final factor in Bitcoin’s favor is that it has finally tipped into the mainstream. The launch of the new spot Bitcoin ETFs in January 2024 was a key reason. These ETFs opened up Bitcoin to hedge fund managers, institutional investors, and everyday investors already familiar with exchange-traded funds. Suddenly, Bitcoin became as easy to buy as a tech stock, and more than $100 billion flowed into these ETFs.
There’s likely to be even more mainstream acceptance of Bitcoin coming. The Trump administration has made crypto a priority, and has already taken steps to boost Bitcoin’s future prospects by creating a Strategic Bitcoin Reserve. Any future buying of Bitcoin by the U.S. government would obviously be huge for Bitcoin’s price.
Given all this, Bitcoin might just be the best cryptocurrency to buy and hold forever. But don’t forget to buckle up, because this could be a wild ride.
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Dominic Basulto has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool recommends WisdomTree. The Motley Fool has a disclosure policy.
