Critics Say Crypto Is Overpriced, but That’s Not True

If Bitcoin’s cost is making you hesitate, here’s what you should understand.

Despite Bitcoin reaching record levels and the buzz around the new spot Bitcoin exchange-traded funds (ETFs), the crypto industry is still having difficulty drawing in new investors.

The Motley Fool Ascent’s 2024 Cryptocurrency Investor Trends Survey shows that the primary audience for crypto remains Gen Z and young millennial men.

This is surprising, considering the ongoing talk about crypto’s widespread adoption. What’s even more unexpected is that skeptics cite high costs as a reason for avoiding crypto investment. In reality, that isn’t true. Here’s why:

Bitcoin Price Surprise
One reason people may hesitate to invest in crypto could be the perceived high cost. The most likely reason for this reluctance might be a form of “Bitcoin sticker shock.”

Imagine you decide to invest in Bitcoin, but upon checking the current price, you see it’s over $70,000. This could quickly lead you to decide against investing in Bitcoin.

That perspective is quite limited. For starters, you don’t need to purchase a full Bitcoin—you can buy a fraction just as easily. Many crypto trading platforms allow trades for as little as $1.

With such a small investment, you can own a tiny portion of Bitcoin.Buying Bitcoin is unlike buying a new Tesla Cybertruck. Even though they might have similar price points, you can’t purchase a portion of a Cybertruck.

If you’re hesitant about buying fractional shares of Bitcoin, you can still reduce the cost of owning Bitcoin. For instance, you could invest in one of the new spot Bitcoin ETFs, which track Bitcoin’s performance.
The iShares Bitcoin Trust (IBIT 4.79%) and Fidelity Wise Origin Bitcoin Trust (FBTC 4.72%) are both available for less than $70. If the high price of Bitcoin is daunting, the lower cost of a crypto ETF might make the investment more approachable.

Is Bitcoin’s Value Too High or Too Low?
Another interpretation of the “too expensive” argument is that investors believe Bitcoin is overpriced at its current value. Considering Bitcoin just reached a new peak of $73,750 in mid-March, it’s understandable why some might prefer to wait for a price drop to purchase Bitcoin at a lower cost.

Although buying at a lower price is a reasonable approach for purchasing Bitcoin, I don’t think that’s the main consideration for most people. Instead, they likely think it’s simply too late to invest in Bitcoin.

Given Bitcoin’s substantial increase from $1 to $70,000 over the last decade, some may feel its growth potential over the next decade may not be as significant.

However, that’s not the prevailing opinion on Wall Street at the moment. The general agreement is that Bitcoin will reach $100,000 by the end of 2024 and $150,000 by the end of 2025.Beyond that, the potential is limitless. Cathie Wood of Ark Invest predicts Bitcoin could reach $3.8 million by 2030.

If you invest now, you might see almost 50 times your investment return! Therefore, rather than being overvalued, Bitcoin is considered undervalued at its current price.

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