Bitcoin has been a buzzword in the cryptocurrency market for over a decade now. With so much traction to it, digital currency never fails to impress crypto investors. The recent all-time high of US$67,000 is another proof that bitcoin is not here to disappoint investors. However, these record prices don't keep their pace throughout. While bitcoin ETF's debut has helped the digital token touch a new high, there is no assurance that it will keep its place for a long time. This puts crypto investors in a hectic situation to debate over whether it is the right time to buy bitcoin or should they see it as a sell-off season.
Before hitting the recent all-time high, bitcoin maintained a low key for many months. 2021 was a big year for bitcoin and after the cryptocurrency craze in 2020, many new investors initiated to buy bitcoin. This eventually pumped up the digital currency's price and bitcoin reached a record US$64,000 in mid-April, only to face a drastic fall that limped the value in June and July. Fortunately, bitcoin managed to recover from those back-to-back hits with an even intense fight and massive price surge. Since the volatility is evident, we are often put in a situation to choose between buying and selling bitcoin. While experts think any time is fine to buy bitcoin, it is not very convincing for normal investors. Therefore, in this article, Analytics Insight aims to take the debate to another level by discussing the market scenario and past implications. Through our analysis, we found that there is no perfect time to buy bitcoin, and investing in cryptocurrency is all about following certain tactics.
We are familiar with the price fluctuations in bitcoin, but have we through how long it lasts? Yes, whether it is a price surge or a fall, both of them prevail only for a short span in the cryptocurrency market. There is no right time to invest in bitcoin, but we can say that it is safe for long-term investments. Therefore, the only way to shield against such short-term market trends is to buy bitcoin and hold it for a long time.
'Invest and forget' is definitely a mantra that bitcoin traders should keep in mind. Patience and perseverance are all it takes to gain good benefits in the digital currency sphere. Even if your investment tanks 30% today, wait for it to regain the loss in long term. Although bitcoin price falls every now and then, it has constantly reached all-time highs, bringing an array of hope to investors. However, one thing that experts suggest is to follow a strategy when it comes to buying bitcoin. There are a variety of tactics that investors can keep up with to maintain good profits. One of the top tactics is to do Dollar Cost Averaging (DCA). If you are planning to buy bitcoin for US$10,000, instead of investing them all together, split it into five parts and invest them once a week. For example, invest US$2,000 every Saturday. This minimizes volatility risk as it would prevent an entry at a single price point.
October was a big month for bitcoin investors. The digital currency's price went up the roof and skyrocketed like never before. In one month, the bitcoin price has experienced 50% gains. In the wake of the sudden surge, a panel of 50 bitcoin and cryptocurrency experts has predicted that the bitcoin price will continue to climb through 2021. They also hinted that it will hit US$80,000 before surging to US$250,000 by 2025 and a staggering US$5 million per bitcoin by 2030. This is not the first time experts have laid down a forecast that is so gigantic and appetizing. The scenario and predictions show that bitcoin's price or the market trend has nothing to do with investments. Therefore, today is still early to buy bitcoin.
Some investors say buying in the dip is a good option. But experts have varied opinions. If we take the 2008 stock market crash, for example, a few investors bought and averaged out their investments when the BSE Sensex crashed to 15000 levels. Unfortunately, it dipped further and touched 12,000. Some were even willing to buy it at that state. To everybody's surprise, the stock market further crashed to 9000 and left many investors on the brink of collapse. In a nutshell, the BSE has crashed to 9000 after touching 20000. The same scenario is applicable in the bitcoin market. Although it touches record highs, a possible crash is always around the corner, which could be followed by a price spike.
There are chances that bitcoin might go out of existence if you delay the buying options for a long time. The bitcoin supply is limited to 21 million and 91% of has already been mined. Besides this, we also have energy concerns to look at. Bitcoin mining consumes a lot of energy and China rolled out a blanket ban on cryptocurrency trading in the country because of that. On the other hand, we also have bitcoin halving that takes place at certain intervals. With all these in the bag, it is better to buy bitcoin at the earliest if you have that as an option.
Although buying bitcoin is the most talked about subject, when to sell it is also important to note. Selling the bitcoin when the price goes up or when you see a sudden plummet is not a good choice. Instead, keep a goal on what you want while investing in bitcoin and sell it once you achieved it. If you have invested a lot in bitcoin but have very little knowledge, then it is better to withdraw the initial investment and put it on something that you are well-versed at. Even if you are constantly feeling anxious about price surges and falls, it is not too late to opt-out from it. Besides, never invest all your saving in bitcoin. Since the cryptocurrency market is volatile, it is better to just invest 10% of your total savings in the decentralized model.
Join our WhatsApp Channel to get the latest news, exclusives and videos on WhatsApp
_____________
Disclaimer: Analytics Insight does not provide financial advice or guidance. Also note that the cryptocurrencies mentioned/listed on the website could potentially be scams, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. You are responsible for conducting your own research (DYOR) before making any investments. Read more here.