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Bitcoin Magazine 2025-01-08 19:34:20

Don't Buy The Bitcoin Dip

Follow Frank on X . With bitcoin’s price dipping significantly below $100k again, the “buy the dip” cheerleaders are out in full force. But I’m here to offer a different perspective, which is simply: Don’t buy the dip. Before I continue, let me please make it clear that nothing that I write in this Take is investment advice. Why would I say such a thing? Is it that I hate bitcoin all of a sudden? No. I have other reasons for making such a statement. The first is that I’m trying to keep you from becoming exit liquidity for people like this: Don’t worry guys. The retards are coming. pic.twitter.com/1YL8keRHYa — Breadman (@BTCBreadMan) January 8, 2025 The second is that I like to buy bitcoin when it’s truly selling at a discount, not just when it appears to be selling at one. Let me explain. Right now, bitcoin is trading about 13% off of its all-time highs. While that may be a significant discount for an asset in the world of traditional finance, it’s hardly more than a daily fluctuation in the world of bitcoin. In the four-year bitcoin cycles , bitcoin’s price tends to skyrocket during the years of and after its halving . And then the year that follows tends to be pretty terrible for bitcoin’s price. During that year, bitcoin’s price hits a low, which tends to be in the range of the prior cycle’s high. That was a bit confusing, so let me give you an example. In 2022, the last “pretty terrible” year, bitcoin's price dropped to about $15,500, which was actually about $3,500 lower than bitcoin’s top from the previous cycle — $20,000. If something comparable were to happen in 2026, we’d see bitcoin’s price at approximately $53k (23% below the previous cycle’s all-time high of $69k). Now, that would be a significant discount and a dip worth buying. I don’t share this perspective to dissuade you from continuing with something like a dollar-cost averaging bitcoin investment strategy (one of the best strategies out there for the average retail investor). Instead, I share it because if a loved one came to me and asked me if now was a good time to buy bitcoin, I’d say “not really.” I try to maximize the financial upside (in fiat terms) of investing in bitcoin as much as possible for those who ask me about investing in it — especially those who are new to it. And while I could maybe help someone trade in and out of a bitcoin position in the next year or so, I don’t like to do this, as I encourage people to buy and hold bitcoin for the long haul. But, Frank, the U.S. might announce a Strategic Bitcoin Reserve and other nations may follow suit! And look at all the companies buying bitcoin for their treasuries ! Yes, these things are happening, and so are things like Bhutan selling bitcoin and so have things like Germany selling bitcoin and Tesla selling bitcoin . Up until now, all bitcoin price cycles have been similar. So, while it looks like we have another year of bitcoin price upside in store for us, I think we drop far lower than this current price level when the tables turn. And that’s when I’ll be proactively buying. This article is a Take . Opinions expressed are entirely the author's and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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