I have already made 127% on Bitcoin. Here’s why I keep buying more.

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Since the first purchase of Bitcoin (BTC 2.13%) on April 24, 2020, I have made a return of 127% (at the time of this writing). That number smashes the returns of the S&P 500 and the Nasdaq Composite, two of the most-watched stock indices, over the same period.

This substantial outperformance came despite the huge 75% decline in the price of Bitcoin from its peak of nearly $69,000 reached last November, as the overall cryptocurrency market took a hit in 2022. A massive price drop like this would certainly shake the confidence of even the strongest supporter.

But not me. I’m still incredibly bullish on Bitcoin. Here’s why.

Bitcoin is not like the others

It’s probably no surprise that Ethereum (CRYPTO:ETH) is seemingly getting all the hype and attention. The second most valuable cryptocurrency is touted as a “decentralized computer” that has the potential to disrupt a wide range of industries by cutting out the middleman and delivering better user experiences. Time will tell if this goal will become a reality.

Seen in this light, Bitcoin could be seen as the boring cryptocurrency that has no interesting or disruptive features. But that would be a wrong assumption, in my opinion.

Bitcoin was created to allow two unrelated parties to send money to each other without an intermediary, which was not possible before. And the fact that no one controls her is a profound trait. It really is that simple, but it could have major ramifications for how humans store wealth and transact with others in a world that is becoming increasingly digital. Not to mention an increasingly indebted world, not least as a direct result of the actions of governments and central banks.

Even with Ethereum’s progress since its launch in 2015, Bitcoin has remained the top dog, as its current market capitalization of $330 billion is by far the highest in the industry. It’s been like that since day one, and I think it will still be like that a decade from now.

Unlike Ethereum, Bitcoin does not have a central authority making decisions about its direction. And it’s on purpose. Vitalik Buterin, one of the founders of Ethereum, can continue to add more stages (and delay the completion of stages) into the network development pipeline as he sees fit. Additionally, the transition to a proof-of-stake consensus system leads to even more centralization, which undermines all the value of cryptocurrencies.

Bitcoin is the most decentralized and secure blockchain network, and that’s why I love it. He does not depend on any person or entity to guide his direction. Moreover, Bitcoin is trying to improve our view of the very concept of what money could be. It’s extremely exciting, if you ask me.

The price of Bitcoin is expected to rise

After dropping 64% in 2022, there’s a ton of pessimism in Bitcoin’s price right now. But it could be a great buying opportunity. These massive price drops are normal for any digital asset. And with Bitcoin in particular, it has consistently rebounded from recent lows to new highs.

The Federal Reserve’s policy of rapidly raising interest rates this year, with the stated aim of controlling inflation, has undoubtedly prompted investors to remove risk from their portfolios. I think when the central bank decides to reverse its policy actions and money starts flowing back into riskier assets, Bitcoin will be among the first cryptos to appear.

But because I intend to hold (and be a net buyer of) Bitcoin for the next 10 years (and probably longer), I don’t really dwell on what happens in the short term. I think other investors would be wise to do the same. And for those who are as optimistic as I am, now may be a better time than ever to stock up on Bitcoin.

Neil Patel has positions in Bitcoin. The Motley Fool has positions and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.

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