When is the right time to buy bitcoin?

Disclaimer:

 I am not some certified expert (yet), however I would still air my views on this subject matter. Please do your research before making a choice.

Another important thing to note is that I’m quite bullish on bitcoin, cryptocurrency, or just Decentralized finance (DeFi) as a whole. I believe in the potential of DeFi and I’m just here for it. No worries though, I made a conscious effort during my research to search for news that didn’t quite align with my point of view. I did this to overcome the overconfidence bias, so consider this article, neutral.

So, let’s go down memory lane shall we?

The journey of bitcoin has been a rollercoaster from bullish seasons to bearish seasons. Bitcoin hit a four-digit value ($1,000)  for the first time in 2013. 

In 2017 it hit an all time high of $19,000 in December just before it crashed. Before that, around May 2017, bitcoin surpassed the $2,000 mark and then surpassed $3,000 just a few weeks later and just a day later, it went from $3,000 to $2,700 – a $300 dollar loss in one day – per bitcoin.

Talk about volatility.

Later that year in September, it exceeded $5,000 and from then on investors had bullish sentiments towards bitcoin. By December, it hit the $19,000 mark and then went down to $12,000.

Now in 2020, the year of the pandemic as we know, unless you’re reading this article decades later, was a good year overall for bitcoin. Asides breaking the all time high of $19,000, bitcoin took a step further in being recognised and accepted as a means of exchange in some countries and platforms. For example,  PayPal announced that its customers will be able to buy and sell bitcoin and other virtual currencies using their PayPal accounts. This of course reflected in the price of bitcoin positively.

Some companies who have accepted bitcoin are Microsoft, Wholefoods, KFC Canada and a couple others. KFC Canada specifically piqued my interest because they have a bucket chicken called ‘bitcoin’ bucket which can only be purchased via bitcoin. Whether it’s a marketing strategy or not, I’m here for it.

Bitcoin’s market capitalization

Bitcoin’s market capitalization has grown so much that it’s now surpassed the likes of PayPal, Netflix, Coca-Cola and Disney to sit among the top 18 largest commercial companies in the world.

Why does that even matter?

Well, the larger the market capitalization, the more sustainable a significant price run is likely to be. The  boost to bitcoin’s market capitalization has been driven by significant investment from companies like Square and MicroStrategy, as well as the larger levels of accessibility that’s been provided by PayPal making the digital currency available to its 286 million userbase

SO….TO BUY OR NOT TO BUY?

Lets see what experts have to say. 

According to Fortune’s The Ledger newsletter, “the short answer is that a collapse is all but inevitable — assets that go up 400% are due for a correction.”  they say that with each crash, the volatility of bitcoin reduces and unlike the last major crash that took bitcoin all the way down to $2,000, the next one might take it to $8,000. 

It’s also key to mention that the bullish nature of bitcoin is currently built on a more solid foundation than that of the previous years. A case study is the 2017 bubble where bitcoin was inflated by ‘Initial Coin Offerings’, where ‘crooks’ sold mostly worthless new currencies to a greedy and gullible public, and then put the profits back into Bitcoin but now bitcoin is owned by way more people and has a really huge market cap and is gradually being accepted by companies as a means of exchange.

My Strategy 

At the beginning of this article, I mentioned that I’m bullish on decentralized finance as a whole which includes cryptocurrencies. I consider myself a Hodler but I have set a stop limit, so if bitcoin ever goes down a certain amount, I will sell and then repurchase at a further lower price and continue to Hodl. I am also invested in some altcoins as well, like Ethereum. Will this strategy work? time will tell. 

What’s your strategy?

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This Post Has One Comment

  1. Cynthia

    Also investing in altcoins like eth and lte. Watching the market closely to know when I’ll sell. Great read👌🏽👍🏽

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