Bitcoin’s expensive but this technique proves it’s never too late to buy BTC Seasoned Bitcoin (BTC) investors know that the crypto market trades in cycles, and now that BTC price has surpassed its previous all-time high, a full-on bull cycle is underway. Retail investors may think Bitcoin is now too expensive to buy, but dollar-cost averaging has proven to be one of the most effective methods available. Seasoned Bitcoin (BTC) investors know that the crypto market trades in cycles, and now that BTC price has surpassed its previous. Dec 20, · Seasoned Bitcoin (BTC) investors know that the crypto market trades in cycles, and now that BTC price has surpassed its previous all-time high, a full-on bull cycle is underway. Crypto market data daily view. Source: Coin As this new cycle gathers steam, the mainstream media are all abuzz with articles about Bitcoin and everyone from [ ].
Never too late to buy bitcoinIs it too late to buy Bitcoin?What Is Next After The Crypto Bull Run
This was the first Bitcoin bubble that got some attention on mainstream media and where regular retail investors and some tech-savvy hedge funds got involved as well. Gox largest Bitcoin exchange at the time closed operations around the same time. The massive media coverage together with news of regulated Bitcoin futures launching by the end of the year, which opens the doors to institutional investors, made an explosive mix. Throughout , major financial institutions like JP Morgan, VanEck, and Ameritrade announced that they are working on offering Bitcoin to their clients.
The bubble produced a lot of general awareness for Bitcoin, which sets the stage for another potential bubble in the near future. What Bitcoin investors do is make an assumption of what Bitcoin can become in the world economy, and then calculate the Bitcoin price based on the estimated value captured by that market.
Further, some Bitcoin supporters go as far as claiming that Bitcoin is superior to Gold in 3 core aspects:. It is hard to accurately say how much a legacy currency like the USD or EUR is worth due to the elastic and intransparent nature of fiat currencies. A commonly accepted measure is the M2 money supply, which includes physical cash, checking deposits, and easily convertible near money.
Companies and high net worth individuals chose to store some of their wealth offshore to reduce the risk of all their funds potentially getting confiscated, or to make use of loopholes in the tax system. However, there are two main problems with offshore bank accounts:. Bitcoin solves both problems by offering a solution to store wealth outside of a particular jurisdiction, without the need to rely on any third party.
Further, unlike funds in offshore bank accounts, Bitcoins are extremely hard if not impossible to confiscate. Hence, it is not unlikely that Bitcoin could become a vehicle or the vehicle to store value that companies or individuals want to keep offshore. Some of the largest stores of value include Gold, Real Estate , and Bonds. Many Bitcoin supporters believe that Bitcoin is a superior store of value to any existing solution. On the contrary to Gold, Real Estate, or Bonds, Bitcoin can be easily transported, is highly liquid, and is non-confiscatable.
Now that we have explored some of the potential valuation ceilings that Bitcoin could reach, the next step is to outline a handful of key catalysts that could get Bitcoin there.
Increasing pressure from the US in the form of tariffs, uncertainty about global debt, and central banks being forced to lower interest rates to avoid a recession, has formed an explosive mix. Right after the Chinese Yen broke the peg, a substantial Bitcoin rally followed.
As global uncertainty continues to build, more investors may see Bitcoin as a safe haven to allocate a portion of their net worth to. Currently, there is no way for large investors to purchase substantial amounts of Bitcoin through an exchange-traded product. This prevents many funds from getting exposure to Bitcoin since they are often not qualified or allowed to purchase actual Bitcoin themselves. One powerful example of the impact an ETF can make is Gold. Many Bitcoin ETF proposals have been submitted to date.
However, none have been approved yet and they were all rejected or postponed due to liquidity and manipulation concerns by the SEC. That said, it is not unlikely that a Bitcoin ETF will eventually be approved. As more people hear and learn about Bitcoin, the chance increases that a portion of those individuals eventually decides to dip their toes into Bitcoin and purchase a small amount.
In its current form, Bitcoin is not ideal to be used as a medium of exchange just yet. According to Murad Mahmudov, from Adaptive Capital , a cryptocurrency must go through 2 stages before eventually becoming a great currency:.
Arguably, Bitcoin is currently somewhere between a collectible and a store of value. That said, this has not stopped hundreds of merchants from starting to accept Bitcoin for purchases. Bitcoin is an incredibly volatile and risky asset. The concept of digital currency is still largely unproven, and there are many ways in which Bitcoin could fail or be a poor investment.
Now that we have explored the potential of Bitcoin and how it could fit into the global financial system, it is also important to analyze the risks of investing in Bitcoin. Although this is significantly smaller than some of the assets that Bitcoin aims to take on, it is a substantial valuation when compared to other companies or assets. Hence, Bitcoin investors need to be aware that when investing in Bitcoin today, the upside is significantly smaller than the one very early investors are enjoying.
This figure is not just for cryptocurrency markets but with all trading markets as well. It may not be flashy and fund shattering, but it is a trusted, prudent approach to building long term wealth. The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision. Source link. Save my name, email, and website in this browser for the next time I comment.
Sign in. Log into your account. Forgot your password? Password recovery. Recover your password. Get help. Crypto Now. Home Bitcoin. All Altcoin Ethereum LiteCoin. Bitcoin, movimiento brutal para limpiar el mercado. Ether wallet addresses with at least 1 ETH hit record high. Altcoins LiteCoin. Crypto market data daily view. Source: Coin As this new cycle gathers steam, the mainstream media are all abuzz with articles about Bitcoin and everyone from world-renowned investment gurus to Uber drivers seem to have an opinion on the best tips, tricks, and moon coins one should buy in order to generate instant riches.
Data shows dollar-cost averaging is best for accumulating Bitcoin For the average investor who is looking for a more simplified approach, multiple studies have shown that dollar-cost averaging Bitcoin purchases has provided a return on investment that most funds would boast about.
Portfolio value over time. Source: dcabtc. Slow and steady is proven to win the race Day traders, investment pundits and crypto Twitter celebrities often post eye-watering profit-and-loss screenshots of their trades which would make any investor want to FOMO into Bitcoin but this is proven to not be the most effective method. Please enter your comment! Please enter your name here.