Gone are the days when Bitcoin (BTC +0.89%) was just some esoteric technology that flew under the radar, was viewed as a tool mainly for illicit transactions, and had a highly uncertain future. This is now a legitimate financial asset that carries a market cap of $2.2 trillion, rivaling some of the most valuable companies on Earth.
The return speaks for itself. Just in the past three years, Bitcoin's price is up 416% (as of July 10), crushing the stock market's gain. Based on historical trends, the leading cryptocurrency's price is poised to be substantially higher three years from now.
Should you buy Bitcoin before 2028? The answer is clear, but it's important to look at history first.
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Bitcoin's four-year cycle
Unlike any other asset out there, Bitcoin has a predetermined inflation rate. Roughly every four years, the amount of new Bitcoin units mined gets reduced by 50% in what's known as a halving. The last one occurred in April 2024, leading to 3.125 Bitcoin units being created with every new block.
Zooming out and looking at Bitcoin's price chart, with knowledge of when halvings took place, provides valuable info. It's easy to recognize that the crypto experiences four-year cycles that are fairly similar. In the 12 to 18 months after a halving, Bitcoin typically reaches a new all-time high. After the May 2020 halving, Bitcoin hit a high of about $68,000 in November 2021.
The halving before then took place in July 2016. About 17 months later in December 2017, Bitcoin reached its record at the time of over $19,000.
After these peaks were hit, Bitcoin experienced a drawdown. Investors believe there's a bubble, causing demand to dry up at the same time. This selling pressure cascades into Bitcoin completely falling out of favor. That's how markets work, with investor sentiment shifting without any warning. Bitcoin has experienced multiple drawdowns of more than 50% in the past.
It's impossible to tell at what level Bitcoin's price will peak during this cycle. At the 18-month post-halving mark, which will be in October this year, I wouldn't be surprised to see it much higher than the current $111,000. With the passing of the One Big Beautiful Bill Act (OBBBA), government spending and debt are going higher. Bitcoin has benefited from this type of frivolous fiscal policy.
CRYPTO: BTC
Key Data Points
Don't risk missing out on gains
Of course, compared to today, Bitcoin's price could be higher or lower at the next halving, which is likely going to be in the spring of 2028. At that time, the U.S. could be in a recession. Or maybe the OBBBA causes inflation to come raging back, leading to rapidly rising interest rates that crush investor confidence, resulting in another crypto winter.
No one knows what will happen. But investors who wait until then to buy are betting on the price being lower than it is today.
I see this as a silly course of action. Bitcoin has always rewarded its long-term holders. Those who try to time the market in the hopes of getting in at a lower price in the future are not playing the right game.
Bitcoin is a scarce asset, with a fixed supply cap of 21 million units. It's decentralized, as no single entity is in charge. It's digital and borderless, which is a key advantage in a future that might see artificial intelligence (AI) agents transacting with each other. And Bitcoin is invading the traditional financial system, while being viewed in a favorable light by politicians and regulatory bodies. These positive factors shouldn't be discounted.
Should you buy Bitcoin before 2028? There will be volatility along the way, as has always been the case, but the answer is a resounding "yes!"
