With bitcoin’s value dipping considerably beneath $100k once more, the “purchase the dip” cheerleaders are out in full power.
However I’m right here to supply a unique perspective: Don’t purchase the dip.
Earlier than I proceed, let me please make it clear that nothing that I write on this Take is funding recommendation.
Why would I say such a factor? Is it that I hate bitcoin impulsively?
No.
I’ve different causes for making such a press release.
The primary is that I’m making an attempt to maintain you from turning into exit liquidity for individuals like this:
Don’t fear guys.The retards are coming. pic.twitter.com/1YL8keRHYa
— Breadman (@BTCBreadMan) January 8, 2025
The second is that I like to purchase bitcoin when it’s really promoting at a reduction, not simply when it seems to be promoting at one.
Let me clarify.
Proper now, bitcoin is buying and selling about 13% off of its all-time highs. Whereas which may be a major low cost for an asset on the planet of conventional finance, it’s hardly greater than a day by day fluctuation on the planet of bitcoin.
Within the four-year bitcoin cycles, bitcoin’s value tends to skyrocket throughout the years of and after its halving. After which the yr that follows tends to be fairly horrible for bitcoin’s value. Throughout that yr, bitcoin’s value hits a low, which tends to be within the vary of the prior cycle’s excessive.
That was a bit complicated, so let me offer you an instance.
In 2022, the final “fairly horrible” yr, bitcoin’s value dropped to about $15,500, which was truly about $3,500 decrease than bitcoin’s high from the earlier cycle — $20,000.
If one thing comparable have been to occur in 2026, we’d see bitcoin’s value at roughly $53k (23% beneath the earlier cycle’s all-time excessive of $69k). Now, that might be a major low cost and a dip value shopping for.
I don’t share this attitude to dissuade you from persevering with with one thing like a dollar-cost averaging bitcoin funding technique (among the finest methods on the market for the typical retail investor). As a substitute, I share it as a result of if a liked one got here to me and requested me if now was a very good time to purchase bitcoin, I’d say “probably not.”
I attempt to maximize the monetary upside (in fiat phrases) of investing in bitcoin as a lot as potential for many who ask me about investing in it — particularly those that are new to it. And whereas I might perhaps assist somebody commerce out and in of a bitcoin place within the subsequent yr or so, I don’t like to do that, as I encourage individuals to purchase and maintain bitcoin for the lengthy haul.
However, Frank, the U.S. may announce a Strategic Bitcoin Reserve and different nations might comply with go well with! And take a look at all the businesses shopping for bitcoin for his or her treasuries!
Sure, these items are occurring, and so are issues like Bhutan promoting bitcoin and so have issues like Germany promoting bitcoin and Tesla promoting bitcoin.
And the next announcement was made simply hours after I initially printed this piece:
JUST IN: 🇺🇸 US authorities cleared to promote 69,370 #bitcoin value $6.5 billion seized from Silk Street, a federal decide dominated. pic.twitter.com/dGB7S9iO8T
— Bitcoin Journal (@BitcoinMagazine) January 9, 2025
Up till now, all bitcoin value cycles have been related. So, whereas it appears like we now have one other yr of bitcoin value upside in retailer for us, I feel we drop far decrease than this present value degree when the tables flip.
And that’s once I’ll be proactively shopping for.
This text is a Take. Opinions expressed are totally the creator’s and don’t essentially mirror these of BTC Inc or Bitcoin Journal.
