How to know when you should buy in
Disclaimer: I am not a financial adviser, don’t take anything I say as financial advice.
The crypto market has been declining since November, there have been a few smaller peaks in the bitcoin price, but the general trend has been pointing down. We are truly and deeply in the midst of a bear market, or are we? If you go back one year, most of the established experts and on-chain analysts were predicting bitcoin at $100,000 by the end of 2021. After months of decline, there was always that niggling feeling that the bull run never really climaxed with a blow-off top, and the past month has seen a steady rise in price again.
So is now the time to FOMO in and catch this wave to the top?
There is always the chance that the market will explode, and you will 10x your money overnight. However, what if you buy in, and a week later, the price collapses to a fraction of its current value and takes until a year after the next halving to recover? You would still walk away with more money if you hodled, but you would spend a lot of time thinking about how you could have stacked way more Sats if you had just held off for a week longer. (Sats are Satoshis, there are 100 million Sats in a Bitcoin).
Should you buy bitcoin now?
If you dollar cost average in (DCA), it is always the right time to buy bitcoin. DCA means that you buy a certain dollar amount in bitcoin regularly instead of one lump sum. So it might be that you buy $100 worth of bitcoin every Tuesday or so. The price of bitcoin is set to rise over the next few years (possibly decades) according to any metric you look at, so it seems like BTC is a good long-term investment. DCA gives you the advantage of taking the stress out of buying BTC, because it’s a win-win scenario.
If the bitcoin price drops, you can get more Sats for your money, if the price goes up, you have more value in BTC.
Naturally, I should mention that some people believe the price of BTC will go to zero and never recover, no one really knows anything, so they could be right. Therefore you should only invest what you can afford to lose.
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