Everyone has heard the stories about bitcoin, and have wondered if it is worth. Here are a few tips on when to buy bitcoin and if it’s worth the hype.
While just 8% of Americans hold any cryptocurrency at all, the future could unfold as soon as that number climbs to 20%. However, with most consumers waiting for the right time of when to buy Bitcoin, the lack of engagement has lead to stagnancy in growth. If you want to get involved and quit standing on the sidelines, you need to learn more about potential investment.
Here is everything you need to know about when to buy Bitcoin.
Understand the Volatility
As you probably know, Bitcoin has been in a holding period since mid-2018. It peaked wildly at the end of 2017, causing lots of shifts as patient people let go of what they were sitting on and other people jumped on board. It quickly tumbled, leaving lots of recent investors frustrated.
If you bought some Bitcoin then, you might feel a little ripped off. If you’ve been waiting to buy it in the time since, you shouldn’t be scared away. Now is still a good time to buy Bitcoin.
However, you need to learn about the potentially volatile nature of the asset. It has a tendency to boom and bust in very distinct ways. While your 20-year-old tech stock might be slowly climbing up in value, Bitcoin is increasing in jerks and falls. There’s no way to predict the short-term price changes but like most other tech assets, it’s going to increase in price eventually.
While paper currency walks on the razor’s edge of value cycles, cryptocurrency isn’t struggling quite as hard. That’s because, even though there are no real answers for this unique case, people interested in Bitcoin see that it has a real place in the future.
There’s a Bear Case to Be Made
Investing during a “bear period” where Bitcoin isn’t making any major leaps but isn’t in freefall is a potentially good time to buy. When any asset is in a slow period, it has the potential of dropping lower than it already is. That’s just the simple reality of what it means to invest in anything.
It dropped steadily and remained stagnant from 2013 to 2016 but then climbed like crazy for a year. Anyone who invested in 2013 still ended up on top by the end of the ups and downs of 2017 and early 2018. However, things haven’t moved too much since.
A bear market is a natural response and settling following most bull markets. Don’t be afraid to invest just because a stock is in a hibernation period. No hibernation lasts forever.
A bear period is a natural reaction. You shouldn’t be alarmed by it. It doesn’t reflect fundamental issues with the stock so much as the natural ebb and flow of how commodities work.
Understanding the Bull Case
If you want to wait until there’s a lot more activity behind Bitcoin, that makes a lot of sense too. Even though Bitcoin’s been showing some recent weakness, it doesn’t speak to the ultimate trajectory of the currency. There are plenty of expectations that Bitcoin will rise in the future as more people use it but it takes people feeling confident for this to happen.
Rising adoption is going to have the biggest impact on how the currency appreciates. It will change tax rates and everything else about investing in its wake.
Several institutions are now including Bitcoin in their operations. Others are open to the wide field of digital currencies that have risen along with Bitcoin. While you might not find PotCoin used at a college campus anytime soon, there’s a possibility you could shop the campus store in Bitcoin soon.
Until we have a better understanding of what that volatility is going to bring, only the most adventurous retailers and sellers are going to use it. It will be quite a long time before we start measuring oil prices in Bitcoin.
As A Long-Term Investment
Every investor needs to think about their actions in the long term. This is what makes Bitcoin so powerful and so unique. When it grows, it does so by leaps and bounds but when it drops, it drops by big jumps as well.
As a long-term investment, Bitcoin is just as good as many other tech stocks out there. While few investors have their long-term strategy mapped out, long term investors of Bitcoin have seen a return without a doubt.
If you want to buy at the dip, that’s the best time to invest. If you’re planning to make money fast, that’s not going to pay off as well. However, if you’re willing to go along for the ride and buy when things are slow, you’ll take advantage of what is likely to be a temporary discount.
Day traders looking to make some easy money stay away from cryptocurrency. As they’re the people who ultimately set the tone when it comes to how the market moves, their works have scared away a lot of investors. However, if you’re not the type to want to spend your time day trading or options trading, Bitcoin is poised to give you the kind of return you’re looking for now.
There’s a lot of potential growth to come, as digital currency markets are still much smaller than the average asset market. Right now, there is just a fraction of the engagement that will be seen in the future. There will be ups and downs but if you’re going to get involved, you should act sooner than later.
Now is When To Buy Bitcoin
If you’re still wondering when to buy Bitcoin, the short answer is “now.” However, deciding how much requires you to do some research into just how high the market can climb. If you’re new to investing, do some more research before you come up with a dollar amount.
To learn more about blockchain, that fundamental core of what helps crypto function, check out our latest guide.