Key Factors Driving Bitcoin's Future Growth

Key Factors Driving Bitcoin's Future Growth

When it comes to Bitcoin, you can ignore the short-term volatility and focus on the long-term upside. For the past two months, Bitcoin (CRYPTO: BTC) has lived up to its reputation as one of the most volatile assets in the world.

Bitcoin ETF inflows

It all starts with the new spot Bitcoin exchange-traded funds (ETFs). For the first four months of 2024, massive investor inflows into these ETFs have led to a huge rally in Bitcoin's price.

The halving

The second major reason to buy Bitcoin now is the halving. This event, which took place on April 19, results in the rewards paid out to Bitcoin miners being slashed in half.

Both of these results are very important for investors. Increasing the perceived scarcity of any asset should lift its price, and it's no different with Bitcoin.

For that reason, halving events have historically been very bullish for Bitcoin.

That being said, it's hard not to see the new spot Bitcoin ETFs as a real game-changer.

As long as investors of all sizes continue to plow their money into these ETFs, I'm going to buy Bitcoin like there's no tomorrow.

Don't believe the hype?

And that leads me to an important warning for equity investors who are new to crypto. Bitcoin can be a riskier investment than buying an individual stock, primarily due to its volatility. There have been plenty of reminders of this in 2024, with Bitcoin moving up or down 10% in a single day. And keep in mind, some of the smartest investors in the world -- including billionaire Warren Buffett -- say they have no intention of ever buying Bitcoin.