Forget the “Magnificent Seven” Stocks: 1 No-Brainer Cryptocurrency to Buy Instead | The Motley Fool
In the investment world, 2023 proved to be a year where the so-called “Magnificent Seven” stocks outperformed, delivering an average return of 111%, a stark contrast to the Nasdaq Composite’s 43% increase. This surge was largely fueled by the artificial intelligence boom, accentuating investors’ propensity for leading tech companies. However, a shift in perspective is now essential for those aiming for monumental returns over the next decade.
One cannot overlook Bitcoin’s remarkable ascent since the onset of 2023, with its price soaring by 208%. Matching the performance of the Magnificent Seven, Bitcoin, on a long-term horizon, arguably possesses a greater potential for upside when compared to these megacap tech businesses.
The recent launch of Bitcoin spot exchange-traded funds (ETFs) in January signified a pivotal moment, quickly amassing billions in assets. This signifies a burgeoning interest in Bitcoin as a legitimate financial asset, providing an accessible avenue for exposure to its price dynamics.
Another milestone on the horizon is the next Bitcoin halving event, scheduled for April, which reduces the new supply of Bitcoin by half and consequently, its inflation rate. Occurring approximately every four years, this event has historically served as a catalyst, propelling Bitcoin to new all-time highs.
Bitcoin’s utility as a store of value cannot be understated, given its hard cap of 21 million coins. The fact that over 70% of Bitcoin’s supply has remained unmoved in the past year, even amidst price hikes, underscores its growing acceptance and use. Its attributes of divisibility, transaction feasibility, portability, and verifiability render it superior to traditional stores of value like gold.
From a broader perspective, Bitcoin presents itself as a hedge against financial disruptions. This is particularly evident in the context of the United States, where the burgeoning $34 trillion national debt, exclusion of Social Security, Medicare, and Medicaid liabilities, and an expanding fiscal deficit, spotlight the unsustainability of the current financial system. In this light, Bitcoin stands out as a prudent financial choice, promising a significant upside as it gains broader acceptance among individuals, businesses, and governments.
Despite its promising trajectory, the journey is not devoid of risks. The potential for major countries to ban Bitcoin poses a significant threat, potentially impacting its legality and, consequently, its price. Unlike the Magnificent Seven companies, which derive revenue from tangible products and services, Bitcoin’s regulatory landscape remains uncertain.
For investors considering Bitcoin, a cautious approach of starting with a small investment is advisable. This strategy allows for continuous learning and confidence-building. Looking a decade into the future, it is plausible to envision a scenario where the inclusion of Bitcoin in one’s portfolio reaps substantial rewards.
