If you’ve been sitting on the sidelines observing the market, you might be wondering when the next dip will come around. While Bitcoin is very volatile, this mindset can lead to missed opportunities to buy Bitcoin at a low price and, worse yet, getting you stuck in an “analysis-paralysis” mode.
Before we delve into the topic of the day it is important to realize that Bitcoin is a risky and volatile investment. It can drop below your entry point at any time. Therefore, even our recommendation is pure speculation and does not guarantee that you will make money.
Having said that, there are several opportunities around the corner. These opportunities give some hints, or better yet indications, as to the right time to enter the market. Let’s delve into these and discover when it would make the most sense to purchase Bitcoin.
The best time was in 2018 – The second best time is today.
I can already hear you saying: “Wait a minute, if I have bought in 2010 I would be retired right now. Why would 2018 be the best time?”. And you would be right. However, most retail investors entered the market in the previous bull market, during 2017. Since bitcoin was a very niche investment and highly technical in nature, chances are that you wouldn’t even be able to buy it if you knew the opportunity existed.
So… 2018. Bitcoin finds a new bottom after a dreadful bear market, at $3200 USD. The media claims that it is no longer a viable alternative to government-backed currencies. Most investors despise it. And yet, like clockwork, the popular cryptocurrency follows its historical price patterns, recovering back to the $11.000 price levels before making a run to $42.000 in early 2021. That is a 13x return!
Do you feel somewhat disappointed that you didn’t know about Bitcoin back then? Don’t worry, you’re not the only one. It is usually when cryptocurrency prices go up that investors start to, once again, pay attention to the trend. This is what brings us to today.
Buying today – You’re not too late
New investors that do not yet understand Bitcoin find it odd that some numbers on a screen backed by nothing can be worth more than $40.000. To them, it is almost incomprehensible that the same digital coin could one day be valued at $1 million dollars.
However, as soon as the same investors start exploring the dynamics of our current financial system, and understanding how money really works, the idea becomes more realistic.
The question is not necessarily how high Bitcoin can go, but how low the dollar can go. We are already observing that the current economic instabilities related to the COVID19 lockdowns have caused massive bailout packages on a global scale. More than $10 trillion has been printed and another $1.9 trillion packages were just accepted by congress. The more new money that enters the economy, the weaker the dollar becomes. This is exactly why the value of homes and other investment opportunities keeps increasing steadily.
Today, we are looking at a future where inflation rates will increase to double digits on an annual basis, something that would result in a complete devaluation of savings for individuals and company cash reserves for businesses.
Thankfully, large institutional investors like Michael Saylor understood this early on and invested all of his company’s cash reserves in Bitcoin. Right now, his investment has nearly tripled in less than one year, and the businessman is hosting seminars for other businessmen as well. At this point, everyone knows the dangers that inflation can bring, and everyone is looking for an “exit valve” of the traditional financial system. The only option that seems to do the job well is Bitcoin, which is why we expect to see many more businesses allocating part of their treasuries into it.
At the moment, we are already seeing Bitcoin leaving exchanges and being stored in cold wallets at a rapid pace. Everything indicates that we are headed towards a “supply shortage” which essentially means that there will no longer be any Bitcoin to sell on the open market. Once that happens, everyone will race to purchase Bitcoin directly from the miners who mint it. Naturally, due to the demand, prices will increase further, as only Paypal, Cashapp, and Grayscale are currently buying more than the supply that is being introduced to the market on a daily basis.
This should give you a better idea as to why you should purchase Bitcoin right now. An asymmetric risk-reward opportunity like Bitcoin occurs only once in a lifetime. And the only thing standing between you and this revolution is a little bit of courage and a lot of personal research.
This article is for information and educational purposes only and does not form a recommendation to invest or otherwise. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.