Key Points
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At almost two decades old, Bitcoin has developed a dominant brand name, deep liquidity, and powerful network effects.
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With a hard supply cap of 21 million units, this cryptocurrency’s scarcity is an invaluable feature.
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Bitcoin’s history is full of volatile cycles, but patient investors have always been rewarded.
At roughly $63,000, Bitcoin (CRYPTO: BTC) currently trades 50% off its record high from October last year (as of July 9). The bear market is certainly testing investor confidence in the digital asset. This is particularly true since the stock market is close to its peak right now.
You might be wondering whether Bitcoin is a good cryptocurrency for long-term investors. Here are three reasons why I believe it’s a smart buy on the dip.
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Person buying Bitcoin on smartphone crypto app.
Image source: Getty Images.
First-mover advantage
With its white paper released in late 2008, Bitcoin is the oldest digital asset. This has given it a first-mover advantage that has supported its leading market capitalization. Even in a depressed environment, Bitcoin represents 58% of the overall crypto industry.
It has unrivaled brand recognition, and at almost two decades old, it has proven staying power.
In 2025, $3.6 trillion in value was moved across the Bitcoin blockchain. This represents a deeply liquid system working as intended.
Bitcoin also possesses a powerful network effect. Nodes, miners, developers, and users benefit from an improving value proposition over time as more stakeholders join. The network effect extends outward to companies building new Bitcoin-related products and services.
Scarcity is valuable
Bitcoin’s most compelling characteristic is its scarcity. There will only ever be 21 million units in circulation. This is a hard supply cap that’s etched in its software and enforced by the network’s participants. It has not changed and won’t unless these stakeholders want to undermine the integrity of Bitcoin.
The scarcity is extremely valuable when viewed next to the current monetary system. For example, the U.S. dollar, which is the global reserve currency, continues to see its supply expand. This results in constantly eroding purchasing power. Consequently, the U.S. operates with nearly $40 trillion in federal debt (and counting).
If investors understand this backdrop, they will naturally gravitate toward Bitcoin and its hard-coded scarcity.
Cycles are normal
When it comes to any asset, bear markets are never fun. They can test the conviction of even the strongest bulls. However, Bitcoin’s history shows that these volatile cycles are normal. The cryptocurrency has always bounced back to reach newer highs.
In the past 10 years, Bitcoin’s price has experienced multiple drawdowns of 50% or more. Before the current bear market, the digital asset tanked 74% from the high in November 2021 to the low about one year later. It then began soaring again.
No one knows when this downturn will rebound, but Bitcoin has always eventually rewarded patient investors. I believe this trend will continue.
Should you buy stock in Bitcoin right now?
Before you buy stock in Bitcoin, consider this:
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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.