The good news for crypto investors is that Bitcoin (BTC 1.68%) is up 65% for the year. At its current price of $70,000, it is now within reach of its all-time high of $73,750 from earlier this year.

The bad news, however, is that the cryptocurrency has significantly underperformed expectations this year and has struggled to break the $70,000 mark for several months now. As a result, some investors are taking a wait-and-see approach or moving their money elsewhere. Should you do the same, or is now the time to buy?

Bitcoin and investor expectations

To answer this question, it is important to understand how investor expectations for the digital coin have steadily declined since the start of the year. In January, investor enthusiasm around the launch of the new Spot Bitcoin exchange-traded funds (ETFs) led a huge rally that eventually pushed it to an all-time high of $73,750 in mid-March.

No surprise here, but at the time, analysts predicted that Bitcoin would easily cross the $100,000 mark within a few months. What really happened? Investor inflows into spot ETFs began to slow, and actually stopped in August, when the crypto market suffered a “flash crash” that sent all cryptocurrencies lower.

And don’t forget this year’s Bitcoin Halving Event. This, too, was supposed to drive up its price. There have been three previous halvings – in 2012, 2016 and 2020 – and each of them propelled crypto to a new all-time high, so hopes were extremely high for the April 2024 halving.

In 2020, for example, Bitcoin began its stratospheric rise to $69,000 after being halved. But so far, the halving by 2024 has over-promised and under-delivered. It’s now trading just 10% higher than it was seven months ago, and many investors may have forgotten about the halving altogether.

Bitcoin vs. other “risk on” assets

It is also underperforming on a relative basis compared to other popular cryptocurrencies. Meme Coins Dogecoin And Shiba Inufor example, are both up more than 70% for the year. Other meme coins are up as much as 1,000% for the year.

Bitcoin is also underperforming crypto stocks. For example, MicroStrategy (MSTR 13.17%)which many investors view as a proxy stock for cryptocurrency, is up 244% this year. This is almost four times the earnings of the coin itself.

And don’t forget high-flying tech stocks like Nvidiaup 190% this year. This represents almost three times the gains of Bitcoin. In short, investors have many options if they want a high-risk, high-reward investment. Crypto is no longer the only game in town.

The main catalysts to come

The 2024 presidential election could end up being a big catalyst for Bitcoin, if it results in an overhaul of the crypto regulatory environment. For the first time, it has become a campaign issue in a presidential election, and sentiment appears to be changing in Washington, D.C., on how to regulate digital currency.

Image source: Getty Images.

New crypto market regulations appear to have bipartisan support and pro-Bitcoin policies are already being discussed at the highest levels. At the very least, 2025 could begin with the current head of the Securities and Exchange Commission, Gary Gensler, being replaced by a more pro-crypto regulator.

From a longer-term perspective, Bitcoin is gradually becoming an increasingly important part of the global financial system. We are entering a new institutional era, in which large institutional investors increase their allocations and major Wall Street firms launch new investment products. Even if institutional investors decide to increase their crypto allocation by just 1%, it could lead to a tsunami of new money flowing into Bitcoin.

Long-term outlook

If you are considering investing in Bitcoin, it is important to keep a long-term view. Yes, results were lower than expected this year. Yes, it underperforms other “risky” assets. And, yes, two catalysts – the launch of crypto ETFs and the halving – over-promised and under-delivered.

However, the long-term outlook for Bitcoin remains unchanged. That’s why some of the biggest names on Wall Street are still predicting the price could hit $1 million by 2030. And, if you look even further, that’s when the its price performance could be out of the ordinary. .

Michael Saylor, founder of MicroStrategy, estimates the price could reach $13 million over the next two decades. This represents a gain of almost 20,000% compared to current prices!

Ultimately, I trust Bitcoin’s all-time high and its proven ability to generate market-beating returns. I’m buying it now at a discounted price and keeping it for the long term.