With bitcoin’s worth dipping considerably under $100k once more, the “purchase the dip” cheerleaders are out in full pressure.
However I’m right here to supply a distinct 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 unexpectedly?
No.
I’ve different causes for making such a press release.
The primary is that I’m making an attempt to maintain you from changing 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 that could be a big low cost for an asset on this planet of conventional finance, it’s hardly greater than a each day fluctuation on this planet of bitcoin.
Within the four-year bitcoin cycles, bitcoin’s worth tends to skyrocket in the course of the years of and after its halving. After which the yr that follows tends to be fairly horrible for bitcoin’s worth. Throughout that yr, bitcoin’s worth 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 worth dropped to about $15,500, which was really about $3,500 decrease than bitcoin’s prime from the earlier cycle — $20,000.
If one thing comparable have been to occur in 2026, we’d see bitcoin’s worth at roughly $53k (23% under the earlier cycle’s all-time excessive of $69k). Now, that might be a big low cost and a dip value shopping for.
I don’t share this angle to dissuade you from persevering with with one thing like a dollar-cost averaging bitcoin funding technique (probably the greatest methods on the market for the typical retail investor). As an alternative, I share it as a result of if a cherished one got here to me and requested me if now was an excellent time to purchase bitcoin, I’d say “not likely.”
I attempt to maximize the monetary upside (in fiat phrases) of investing in bitcoin as a lot as doable for individuals who ask me about investing in it — particularly those that are new to it. And whereas I might possibly 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 swimsuit! And take a look at all of the companies buying bitcoin for their treasuries!
Sure, this stuff are taking place, and so are issues like Bhutan selling bitcoin and so have issues like Germany selling bitcoin and Tesla selling bitcoin.
Up till now, all bitcoin worth cycles have been related. So, whereas it appears to be like like we’ve got one other yr of bitcoin worth upside in retailer for us, I believe we drop far decrease than this present worth stage when the tables flip.
And that’s once I’ll be proactively shopping for.
This text is a Take. Opinions expressed are fully the writer’s and don’t essentially mirror these of BTC Inc or Bitcoin Journal.