Bitcoin (CRYPTO: BTC), recognized as the largest cryptocurrency globally, has been a significant point of discussion in 2024. After facing a dip earlier in the year and briefly falling below $40,000, the digital currency swiftly recovered and performed much better in the prevailing high-interest-rate scenario than anticipated.

As inflation rates dropped and the likelihood of reduced interest rates emerged, Bitcoin surged alongside tech and growth stocks, distinguishing itself from many other cryptocurrencies.

Following President-elect Donald Trump’s victory on election night, Bitcoin and other cryptocurrencies experienced a significant boost. Since November 5, Bitcoin has seen nearly a 50% increase, now surpassing $101,000. So, should you consider buying Bitcoin below $115,000? Let’s explore this further.

Increased acceptance and potential regulatory improvements

During the presidential campaign, the crypto community formed a favorable relationship with Trump, and this is now yielding positive results. Trump has pledged to establish the U.S. as the “crypto capital of the world.”

He has also appointed several pro-crypto individuals to lead vital agencies governing the industry. Gary Gensler, the chair of the Securities and Exchange Commission (SEC), known for implementing several rules that crypto supporters dislike, is set to resign once Trump assumes office.

Prominent figures like Coinbase’s chief policy officer, Faryar Shirzad, express optimism about the forthcoming U.S. Congress and anticipate that crypto legislation could progress through the House and Senate rapidly. There are currently two key bills on the agenda for crypto advocates: one aims to establish a formal regulatory framework for cryptocurrencies, addressing many of the uncertainties companies face; the other seeks to create guidelines for licensing stablecoin firms. Stablecoins are digital currencies linked to traditional currencies such as the U.S. dollar or commodities.

Alongside a supportive regulatory environment, Bitcoin has gained traction due to the increasing consensus that it serves as a hedge against inflation. With only 21 million Bitcoins capable of being mined and the rate at which they are mined halved approximately every four years, Bitcoin is considered a scarce asset akin to gold. The majority of these tokens have already been mined.

Bitcoin Supply data from YCharts

Recently, Federal Reserve Chair Jerome Powell compared Bitcoin to digital gold, providing one of the strongest endorsements for the token. Additionally, BlackRock, the largest asset management firm globally, published a report recommending that investors allocate up to 2% of a diversified portfolio to Bitcoin, though it cautioned investors to consider the inherent risks, including price volatility and its potential lack of wider acceptance.

Is purchasing Bitcoin under $115,000 advisable?

Bitcoin is currently benefitting from various advantages, including a regulatory landscape under the incoming Trump administration that may be the most favorable in history for the crypto sector. Moreover, an increasing number of experts and financial institutions view the cryptocurrency as an effective hedge against inflation and economic uncertainty, although it continues to thrive in a risk-oriented market. The sustainability of this trend remains uncertain.

In my opinion, Bitcoin represents a sound long-term investment opportunity. While its historical performance is relatively brief, it has consistently demonstrated resilience against competition and has thrived in various interest rate conditions. After a significant price increase, I suggest adopting a dollar-cost averaging strategy when purchasing Bitcoin, which entails investing a fixed amount of money at regular intervals to average out and ideally lower your overall cost basis over time.

Bram Berkowitz holds Bitcoin investments. The Motley Fool has investments in and recommends Bitcoin and Coinbase Global. The Motley Fool has a disclosure policy.

The Motley Fool is a content partner of YSL News, providing financial news and insights designed to empower individuals with their financial decisions. Its content is produced independently of YSL News.

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