Personal Finance

I Don't Agree with the Bitcoin Bulls on Everything, but They Nail These 2 Points

Joey Frenette

Published: February 1, 2025 9:30 am

With some pretty outlandish Bitcoin price forecasts floating around out there, it’s not hard to imagine that the many Bitcoin bulls are more than willing to double down on the fast-flying cryptocurrency, even at close to all-time highs. Indeed, there are some pretty severe risks that come with betting on Bitcoin at more than $100,000. And while it’s easy to keep storing away excess cash in the appreciating (at least for now) asset as inflation takes bites (it’s becoming more of a nibble again, thanks in part to previous Fed rate hikes) into the purchasing power of the dollar, investors must understand that potential for severe downside.

Indeed, if you’re barely able to cope with the volatility to be had in the tech sector, you’re probably not going to enjoy the Bitcoin ride, especially since it’s nearly impossible to tell if the asset is undervalued, overvalued, or fair-valued, given the lack of intrinsic value. Sure, the same could be said for just about any commodity, including precious metals like gold and silver.

While gold tends to hold up relatively well in the face of stock market sell-offs, Bitcoin may be hit hard in the most vicious of market downturns. While I’m no Bitcoin bull, I find three strong arguments for continuing to buy more as the asset moves further into the six figures.

Its gold-like traits glimmer for some.

You’ve probably heard some younger investors praise Bitcoin as a suitable alternative to gold. Precious metals, like gold, are a “safe” and scarce store of value over time, and they tend to keep up with the pace of inflation. Lately, however, they’ve been as hot as stocks and perhaps have more room to run as investors take a more balanced approach to investing in 2025.

Indeed, it’s good to be bullish on stocks, but diversifying with alternative assets is also a wise move since tremendous events, like DeepSeek, can blindside most investors and send stocks tanking. In any case, Bitcoin has done a great job of hedging against inflation and macro uncertainty in recent years.

In many ways, it’s been an even better bet than gold. And while only time will tell if Bitcoin can hold up come the next big stock market meltdown, I do think the “Bitcoin as a hedge” narrative can make sense, provided you’re in the asset for the long haul and won’t be hitting the sell button come the next crypto market storm because it’s going to happen. It’s impossible to know when it’ll happen, but being prepared to ride out the waves by developing your “crypto legs” is recommended if you’re thinking about initiating a sizeable position.

It’s becoming more legitimate over time as the big money and governments embrace the asset.

Financial guru Kevin O’Leary is a big advocate for Bitcoin. He used to be cautious about the asset, but recent developments seem to have changed his tune. Indeed, volatility and emissions from Bitcoin mining are still concerns that won’t disappear overnight.

That said, O’Leary has really warmed up to the cryptocurrency in recent years, going as far as to add a bit of Bitcoin to his portfolio alongside his gold holdings. Increased ownership among institutions and government is part of the reason why. With the Trump administration embracing crypto as an asset class, I’m also inclined to be more optimistic about Bitcoin.

Indeed, just because a few big names in Wall Street or government are aboard with the asset doesn’t mean you should be a buyer. However, every big name and government vote of confidence, I believe, boosts the legitimacy of Bitcoin. And with that, the case for stashing it as a part of a diversified portfolio grows stronger.