In 2023, the so-called The “Magnificent Seven” stocks produced an outstanding average return of 111%. The Nasdaq Composite indexIn comparison, increased only 43%. The artificial intelligence boom, along with investors’ general appreciation for major tech companies, has sent shares soaring.
But we have to evaluate the current situation with fresh eyes. If you want the potential for big returns, I think investors are better off forgetting Magnificent Seven. Maybe it’s a good idea to buy this no-brainer cryptocurrency Instead and hold it for the next decade.
to the moon
From the beginning of 2023, Bitcoinwho (BTC -0.51%) The price has skyrocketed 208% (as of February 23). Its performance will fit in well with the Magnificent Seven. If we keep a long-term perspective, I think cryptocurrency is superior to any of the megacap tech businesses.
Bitcoin Spot Exchange Traded Fund It was just introduced in January, and they have quickly accumulated billions in assets. This is an early sign of massive interest in having an easy way to gain exposure to the value of Bitcoin. It has become a legitimate financial asset.
There’s also the next half, set to take place in April. This cuts the new supply of bitcoins in half, reducing its inflation rate. The halving occurs roughly every four years, providing a periodic catalyst that could push Bitcoin’s price to new all-time highs, if historical trends provide any evidence.
More and more people are using Bitcoin as a store of value, thanks to its fixed cap of 21 million coins. More than 70% of the outstanding supply of Bitcoin has been moved in the last 12 months. This is despite its price continuing to climb higher. Bitcoin is more divisible, tradable, portable, and verifiable than gold, which has been considered the top store of value asset for thousands of years.
If we look at things from a big-picture perspective, Bitcoin is almost like a hedge against financial catastrophe. This is especially clear if we look at the situation in America
The world’s largest economy has $34 trillion in debt, a figure that has soared since the financial crisis and doesn’t even include Social Security or Medicare and Medicaid obligations. Worse still, the US fiscal deficit is only widening, making matters worse.
Owning a purely digital asset outside of a sustainable monetary and financial system seems like a no-brainer financial decision. This leads me to believe that as more people, businesses, and governments learn about the attractive properties of Bitcoin, they will want to buy and hold it. As a result, its value could be astronomically higher than it is now.
Understand the risks
I see Bitcoin as the best investment opportunity today. Thanks to the factors I mentioned above, digital assets still have great upside in the long term.
However, it is also smart Understand the risks. The biggest threat Bitcoin faces is from the possibility of major country governments banning it, making it illegal to own or mine the crypto. Its value may tank in this instance, as investors will struggle to find ways to trade or use it.
This issue does not exist in the Magnificent Seven companies. They sell products and services that generate revenue and cash flow, and their regulatory approaches are not in question to the same degree as Bitcoin.
Investors interested in owning Bitcoin may be better off starting a small position. The goal should be to continually learn more and gain greater confidence. I believe if you look 10 years from now, your portfolio will thank you.
Neil Patel and his clients have no positions in any of the stocks mentioned. The Motley Fool maintains and recommends positions on Bitcoin. Motley Fool has a disclosure policy.