Bitcoin Under $120k: Last Chance Bargain or Trap?

Bitcoin teeters below the $120,000 threshold—sparking frenzied debate among investors and skeptics alike.

The Price Paradox

Why the psychological barrier matters more than technical charts. Traditional finance types clutch their pearls while crypto natives see blood in the water.

Market Mechanics

Whales accumulate, retail hesitates. The institutional FOMO hasn't even begun—wait until pension funds start dipping toes in these waters.

Risk Versus Reward

Volatility cuts both ways. Today's discount could be tomorrow's regret when ETF approvals flood the market with institutional demand.

Timing The Unpredictable

Attempting to outsmart Bitcoin's cycles remains Wall Street's favorite parlor game—right behind inventing fees for existing assets.

Bottom line: The number looks tempting, but never invest more than you're willing to watch vaporize during Twitter meltdowns.

Image source: Getty Images.

It's still early for Bitcoin

Bitcoin has been around for more than 16 years, since the first block was created in January 2009. After the digital asset's monster rise during that time, you might be wondering if it's too late to buy Bitcoin. That's a valid concern for someone thinking about return potential going forward. However, there are signs it's still very early.

recently released findings from a survey about global fund managers. It was revealed that 75% of respondents have no allocation to crypto. That's extremely surprising, especially when you consider Bitcoin's previously mentioned price performance in the past five years.

To be fair, there could still be major restrictions on what these fund managers are allowed to buy in their portfolios. Nonetheless, that data point shows there is substantial institutional adoption that needs to happen. The popular bitcoin spot ETFs help, as they make things easier and more convenient.

Zooming out and looking at the overall economy paints a similar picture. Bitcoin currently sports a market cap of $2.2 trillion. Compared to all the wealth in the world, whether it's stored in equities, bonds, real estate, or collectibles, for instance, Bitcoin has a tiny penetration rate. Assuming Bitcoin competes with the entire financial system, you quickly realize that it still has significant upside.

Billionaire Michael Saylor, perhaps the strongest Bitcoin bull, has a simple thesis. He believes that over the next two decades, more of the world's capital and wealth will be represented by Bitcoin, pushing up its price.

Governments still need to get involved, too, in a more pronounced way. The U.S. owns Gold that's valued at close to $1 trillion at today's prices. If Bitcoin becomes an important reserve asset on a global stage, it will introduce tremendous buying power that can push its price to unbelievable heights over the long term.

Having the right mindset is key

Bitcoin's historical price chart is impressive. However, there are bouts of extreme volatility, which can be difficult for some investors to handle. This has happened this year, even though some could argue that Bitcoin is growing up and becoming a more mature asset. At the end of the day, Bitcoin trades similarly to a growth tech stock. That could change in the future as more people and institutions own it and its price goes up.

Investors should view any dips as buying opportunities. But that doesn't mean you should be in it to take a quick profit any time the price jumps. In the past, Bitcoin has rewarded patient investors. Those who have been able to hodl through the ups and downs have reaped the rewards.

I believe every investor who has a time horizon of at least five years should consider adding a small amount of Bitcoin to their portfolios. The returns going forward probably won't resemble the past. But thoughtful long-term investors, those who have done their homework, will understand the allure of owning something like Bitcoin that has a fixed supply cap. As always, keep your allocation appropriate for your risk tolerance.

As Bitcoin trades well below $120,000 per unit, investors shouldn't hesitate to buy the top cryptocurrency.