With bitcoin’s value dipping considerably beneath $100k once more, the “purchase the dip” cheerleaders are out in full drive.
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 hastily?
No.
I’ve different causes for making such an announcement.
The primary is that I’m attempting 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 that could be a major low cost for an asset on the planet of conventional finance, it’s hardly greater than a each day fluctuation on the 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 provide you with 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 prime 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 will be a major low cost and a dip price 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 an alternative, I share it as a result of if a beloved one got here to me and requested me if now was a superb 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 many who ask me about investing in it — particularly those that are new to it. And whereas I may 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 go well with! And take 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 price $6.5 billion seized from Silk Street, a federal choose dominated. pic.twitter.com/dGB7S9iO8T
— Bitcoin Journal (@BitcoinMagazine) January 9, 2025
Up till now, all bitcoin value cycles have been comparable. So, whereas it seems 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 stage when the tables flip.
And that’s after I’ll be proactively shopping for.
This text is a Take. Opinions expressed are fully the creator’s and don’t essentially mirror these of BTC Inc or Bitcoin Journal.
