With bitcoin’s value dipping considerably under $100k once more, the “purchase the dip” cheerleaders are out in full drive.
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 abruptly?
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 folks 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 actually 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 major low cost for an asset on this planet of conventional finance, it’s hardly greater than a day by day fluctuation on this planet of bitcoin.
Within the four-year bitcoin cycles, bitcoin’s value tends to skyrocket through 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 had been to occur in 2026, we’d see bitcoin’s value at roughly $53k (23% under the earlier cycle’s all-time excessive of $69k). Now, that may be a major 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 (among the finest methods on the market for the common retail investor). As a substitute, I share it as a result of if a beloved one got here to me and requested me if now was 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 doable for many 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 folks to purchase and maintain bitcoin for the lengthy haul.
However, Frank, the U.S. would possibly announce a Strategic Bitcoin Reserve and different nations might observe swimsuit! And have a look at all the businesses shopping for bitcoin for his or her treasuries!
Sure, these items are taking place, 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 revealed this piece:
JUST IN: 🇺🇸 US authorities cleared to promote 69,370 #bitcoin value $6.5 billion seized from Silk Highway, 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 seems to be like we have now one other yr of bitcoin value upside in retailer for us, I believe 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 fully the creator’s and don’t essentially replicate these of BTC Inc or Bitcoin Journal.
