In March 2011, the price of one Bitcoin sat at $1 USD. 10 years has since passed and that same Bitcoin is now worth $55,000 USD. As it continues in an upward trajectory, reaching new all-time highs, many cryptocurrency newcomers are asking themselves the same question:
“Is it too late to buy Bitcoin?”
Of course, when comparing Bitcoin’s current prices to that of 10 years ago, it can certainly make people feel as though they have already missed the boat. The “too late” mindset sets in, and people convince themselves that they need to wait for the price to drop down considerably before getting on board.
But is this thinking setting them up for further losses?
BUY LOW, SELL HIGH
You may have heard the words “buy low, sell high”, which refers to timing the market; buying assets at a low price, to then sell them later at a higher price. But if you’re waiting around for Bitcoin to drop back down to prices seen before this bull run, you may be waiting a while!
The CIO and co-founder of the BlockTower Capital investment company, Ari Paul, believes that BTC could potentially generate more than 10 times profit over the next two years. He suggests that the current bull market may last until the end of 2022, with Bitcoin reaching prices between $100K and $400K.
With this in mind, it seems the best time to buy Bitcoin is when you decide to.
DOLLAR COST AVERAGING
Unless you are a highly skilled trader, the safest way to purchase assets is to buy them in regular chunks. This is the premise behind dollar-cost-averaging, an investment strategy in which a person divides up the total amount to be invested across periodic purchases in an effort to reduce the impact of volatility on the overall purchase.
By purchasing small regular chunks of Bitcoin, with its long-term potential in mind, it becomes less important whether the asset is in the short term going up, down or sideways.
LONG TERM THINKING
When investing, you should ask yourself the following question: Is the market for the asset going up in the long term?
If you see excellent long-term potential in Bitcoin, then the current price shouldn’t factor too much into your buying decision. Alex Treece, Co-founder at Zabo, stated that “people should take a long term view with Bitcoin. Trying to time the market is extremely difficult (if not impossible) for even the most sophisticated investors.”
“If you buy into the longer-term viewpoint that Bitcoin is a highly attractive, digital store of value, then right now is a good time to buy in the context of a multi-year investment horizon.”
After all, time in the market beats timing the market!
Bitcoin continues to be the best performing asset each year and is now the best performing asset of the decade. Simply put, it doesn’t matter when you buy it, it matters that you buy it!