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, which is just: 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 rapidly?
No.
I’ve different causes for making such a press release.
The primary is that I’m attempting 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 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 every day fluctuation on this 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 had 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 big 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 (top-of-the-line 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 a great 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 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 folks 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 firms 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.
Up till now, all bitcoin value cycles have been related. So, whereas it seems like we’ve got one other yr of bitcoin value upside in retailer for us, I believe we drop far decrease than this present value 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 creator’s and don’t essentially replicate these of BTC Inc or Bitcoin Journal.
