My best cryptocurrency to buy now

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Down more than 65% in 2022, Bitcoin (BTC -0.17%) has become an increasingly polarizing cryptocurrency. On the one hand, Bitcoin bears predict that Bitcoin could fall as much as 50% in 2023 before a market bottom is reached. On the other hand, Bitcoin bulls believe that we have already bottomed out in the market and the price of Bitcoin could actually double in 2023.

Right now, I’m on the Bitcoin bull side. Bitcoin simply has the best risk-reward profile of the major cryptocurrencies. Here’s a closer look at my reasoning.

Historical review

In terms of risk management, a major factor in Bitcoin’s favor is that it has a historic track record of bouncing back from miserable years. In 2014, for example, Bitcoin fell 58% before bouncing back the following year. And in 2018, the same pattern happened, with Bitcoin falling 73% before bouncing back the following year. So, while recognizing that past performance does not guarantee future performance, there is at least historical precedent in place for Bitcoin to rally in 2023.

Image source: Getty Images.

Additionally, Bitcoin has recovered from at least five different bearish crashes over the past decade. In 2011, for example, Bitcoin experienced a “flash crash” that caused Bitcoin to plummet from $32 to $0.01 within days. And similar types of huge market drops occurred in 2015, 2017, and 2021.

In other words, Bitcoin falling off a cliff in 2022 is really nothing new. This is one of the main reasons why there are so many loyal Bitcoin maximalists, ready to buy and hold forever.

The Next Halving

Is it a historical coincidence that three of the worst years in Bitcoin’s existence (2014, 2018, and 2022) happened almost exactly four years apart? Many market analysts believe that there is a pattern in Bitcoin’s crypto market performance that is intrinsically tied to the algorithm that controls the circulating supply of Bitcoin.

When Satoshi Nakamoto originally created Bitcoin, he implemented a mechanism known as the halving, which takes place on a regular schedule. In a halving event, the reward for mining each new block of Bitcoin halves exactly every four years. Currently, the mining reward for Bitcoin is 6.25 BTC. But in 2024, that reward will drop in half, to 3.125 BTC.

In theory, Bitcoin should gain in value with each new halving. Traders anticipate this before the halving and start bidding on the Bitcoin price around 15 months in advance. With the next halving scheduled for early 2024, this means the price appreciation process should begin in 2023.

Crypto hedge fund Pantera Capital has modeled this phenomenon extensively and concluded that Bitcoin will rise throughout 2023 and early 2024 to a level of $36,000 before exploding to a level of $149,000. If this is indeed the case, now is the time to jump on board the Bitcoin bandwagon.

Bitcoin as a global phenomenon

Finally, one of the main reasons I’m bullish on Bitcoin in 2023 is due to its growing acceptance as a global medium of exchange. With each passing year, Bitcoin becomes more popular as an online payment option. And new countries continue to embrace bitcoin as a way to boost economic growth or improve the economic condition of their citizens.

In December, for example, Brazil enacted the so-called “Bitcoin Bill” which will put in place a comprehensive regulatory framework for how Bitcoin can be used both as a means of payment and as an investment asset in the country. As more countries follow Brazil’s lead, it will only make Bitcoin more valuable than it already is. It’s just a simple supply and demand.

Bullish on Bitcoin for 2023

Put all of these factors together, and Bitcoin is my best cryptocurrency to buy right now. He has a long track record of rebounding from miserable years and stock market crashes. It has a powerful catalyst in place to appreciate the price out of 2023 and into 2024. And it benefits from the growing global acceptance of Bitcoin as a medium of exchange and a method of payment.

Since Bitcoin has traditionally always led a market up or down, if you think the crypto is heading higher in 2023, you need to think about adding Bitcoin to your portfolio now.

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