Bitcoin is back near $80,000.

It's been a wild ride.

Check out the price action over the last year.

By now, you know my investing style. I generally prefer buying great assets after they've pulled back.

It isn't easy in practice – hitting the buy button when everyone else is panicking – but investors have a tendency to overreact which often creates attractive entry points.

Bitcoin, however, doesn't play by these rules.

Unlike most assets, Bitcoin has historically rewarded momentum.

Instead of fading after a big run, it has often continued climbing.

Take a look at the chart below.

Right now, Bitcoin ranks in the 98th percentile of overbought readings.

Most investors would see that as a reason to sell.

But history suggests the opposite.

• When Bitcoin has reached similarly overbought levels, it has gone on to finish higher over the next three months 73% of the time, with an average gain of 28.6%.

• Over the next six months, it has been higher 79% of the time, producing an average return of 59.3%.

• And over the following 12 months, Bitcoin has been higher 86% of the time, delivering an average return of 220%.

This is one of the strangest characteristics of Bitcoin.

Momentum tends to create even more momentum.

So Why Is Bitcoin Rallying?

Several factors are fueling Bitcoin's comeback.

• Investors are looking for alternatives to traditional money. Concerns about government debt, a weaker U.S. dollar, and easier monetary policy have pushed more investors toward scarce assets like gold and Bitcoin.

• Big investors are buying again. Money is flowing back into spot Bitcoin ETFs, institutions are adding exposure, and traders who bet against Bitcoin have been forced to buy it back as prices rise. That creates even more demand.

• Regulation is back on the table. President Trump is pushing Congress to pass the Clarity Act, and the SEC has proposed a new framework for regulating digital assets. For years, regulatory uncertainty kept many large institutions on the sidelines. Investors are now betting that clearer rules will unlock a new wave of capital flowing into Bitcoin and the broader crypto market.

None of this guarantees Bitcoin heads straight back to all-time highs.

But for the first time in months, the pieces appear to be falling into place.

Bitcoin – Here’s My Recommendation

I've said this before, and I still believe it today:

Every balanced portfolio should include Bitcoin.

You don't have to bet the farm.

You don't have to believe it'll replace the dollar.

You don't even have to like it.

But after 17 years of outperforming nearly every other asset class, Bitcoin has earned its place in a diversified portfolio.

Yes, it'll remain volatile.

Yes, there will be 30%, 50%, and maybe even 80% drawdowns again.

That's simply the price of admission.

But love it or hate it, Bitcoin has been one of the greatest investments of the modern era. 

And the data says there's a good chance that trend continues.