In a crypto bull market like the one we find ourselves in, it can be difficult to discern which asset is best for your portfolio. Perhaps the old saying "If it ain't broke, don't fix it" could apply here.

While dozens of new cryptocurrencies have launched since Bitcoin (CRYPTO: BTC) became the world's first crypto, there is a compelling case to be made that it remains the best, thanks to tailwinds forming in 2024 and beyond. Here are three reasons Bitcoin is set to soar this year and is worth holding forever.

1. Bitcoin's fourth halving

The first reason to hold Bitcoin now and forever is its recent fourth halving, which took place in April. The halving event is when the reward for mining new Bitcoin blocks is cut in half. As mining is the primary means by which new bitcoins are minted, reducing the reward for miners essentially cuts Bitcoin's inflation rate in half. This process will continue to occur until 2140, when the last Bitcoin is mined.

The halving occurs approximately every four years and has historically had a significant effect on Bitcoin's price. By altering the supply-and-demand dynamics, the halving often triggers a bull run and creates a scarcity effect that typically drives up the price. On average, Bitcoin jumps more than 120% in the year a halving takes place. If historical averages hold true this time around, we could see Bitcoin hit nearly $100,000 by year-end.

2. Post-halving performance

The second reason to hold Bitcoin lies in its performance in the years following a halving, which have historically been particularly explosive. While the immediate aftermath of a halving often sees significant price gains, it typically takes some time for the full effect to materialize in the market. This delay occurs as the reduced supply gradually meets increasing demand, leading to substantial upward pressure on the price.

Historically, Bitcoin gains more than 400% in the years following a halving. If history repeats itself, this would be enough to put its price at nearly $500,000 by the end of 2025. While past performance is not always indicative of future results, it is reasonable to expect that the most recent halving's effects have yet to be fully realized. In other words, the best may still be ahead for Bitcoin during this bull market, making it a compelling investment even at today's prices.

3. Long-term catalysts abound

While Bitcoin has short-term catalysts stemming from the halving that should make the next year and a half productive, the cryptocurrency really begins to shine when you evaluate its potential over the long haul. There are several catalysts that are forming and that support the case for a long-term investment in Bitcoin.

Increasing institutional adoption is one such catalyst. More and more institutions are recognizing Bitcoin's value. Over half of the top 25 most valuable hedge funds currently have exposure to Bitcoin through the recent launch of spot Bitcoin exchange-traded funds (ETFs). Deep-pocketed institutional investors were previously sidelined from joining in on the Bitcoin game, but their arrival signals a major shift in the playing field, which was primarily dominated by smaller retail investors for the last decade and a half.

In addition, there is a clear effort to introduce more supportive legislation. As regulatory clarity encourages broader participation in Bitcoin and in the crypto market overall, adoption will likely continue to grow as the rules of the fame become clearer.

Then there is the gradual coming of age of a new generation of investors. Older generations like baby boomers are less likely to invest in digital assets. But younger investors are far more comfortable with them and likely to seek them out. As the most valuable cryptocurrency, Bitcoin will surely benefit from this trend.

Yet these aren't even my top reasons for a long-term investment in Bitcoin. On a granular level, Bitcoin's core fundamentals of decentralization, security, and finiteness are the most attractive aspects it offers. In an uncertain economic landscape where government deficits continue to balloon, fiat currencies are debased, and overall trust in the powers that be is waning, Bitcoin offers economic sovereignty. You could call it way out.

As more halvings pass and it moves closer to reaching its limited supply of 21 million coins, there is an obvious trajectory where Bitcoin comes under exponentially greater pressure as demand increases, creating a scenario where the price could reach seven figures.

Keeping a measured approach

While there is reason to be optimistic about Bitcoin in the short term, it is imperative that investors approach it with a long-term perspective. The recent halving and historical performance post-halving present strong cases for significant price appreciation in the near future. However, the real value of Bitcoin lies in its long-term potential, driven by institutional adoption, supportive legislation, and a shift in investor preferences toward digital assets.

Bitcoin's core attributes of decentralization, security, and limited supply make it a robust investment in a world of growing economic uncertainty. As more investors recognize these strengths, Bitcoin's demand should continue to rise, potentially leading to substantial price increases. Therefore, whether you are looking at the short-term catalysts or the long-term potential, Bitcoin remains a worthy addition to your investment portfolio. Holding Bitcoin now and forever could be one of the most strategic financial decisions you make.

Should you invest $1,000 in Bitcoin right now?

Before you buy stock in Bitcoin, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Bitcoin wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $669,193!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of July 29, 2024

RJ Fulton has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.

This Cryptocurrency Is Set to Soar in 2024: 3 Reasons to Buy It Now and Hold Forever was originally published by The Motley Fool