When to buy Bitcoin? – A question that has baffled thousands of investors during the decade since the world’s first cryptocurrency was launched and still does, till this day.
Before we dive deep into the matter at hand, please remember that cryptocurrency investment is a high-risk, high-reward action. It’s worth repeating in your head one of the most important unwritten rules when it comes to crypto investing: “NEVER invest more than you can afford to lose.”
Learning when to buy Bitcoin is not exactly a walk in the park, and it’s important that you realize this fact right from the get-go. The sooner you understand the complexities of this process, the better it will be for you and your investing endeavors.
It’s an agreed upon fact that the best universal axiom for investing, Bitcoin investing included, is buying low and selling high. However, there’s a lot more behind this deceivingly simple strategy, as predicting when to exactly do what requires a lot of work, a lot of knowledge, and maybe, just maybe, a bit of luck.
Keep an eye on market cycles
One of the best strategies one can turn to in order to determine what is the best time to buy Bitcoin is to review the cryptocurrency’s market cycles. As we are sure most of you know, Bitcoin is ten years old, meaning that there is currently a decade’s worth of market research which can be evaluated to gain a good understanding of how the market behaves.
Of course, predicting exactly how much the Bitcoin price will drop or rise is near impossible, as a great deal of volatility is still present in today’s crypto market. When will this volatility end? Also close to impossible to state. However, you should focus your attention on when did the Bitcoin price dip lowest during the years. Even though it might not work all the time, being able to remotely predict the next bear market might mean the difference between being an average investor and a great one.
Two thousand eighteen was a very harsh year for cryptocurrencies, Bitcoin included. Even though volatility was at its lowest levels in years, the prices dropped considerably. A lot of experts now believe that this extended bear market will soon end and 2019 will be a very good year for cryptos in general.
Long-term holding (HODL – hold on for dear life)
It’s an agreed-upon fact that there is no perfect method of investing. Having said that, the secret might be to find the one that suits you in particular, rather than spending time chasing the “unicorn” of investment strategies. One of the most popular investment strategies is to long-term hold Bitcoin. There is a strong community that believes in Bitcoin’s future success and, granted; all the reasons are there.
What’s more, many argue that Bitcoin is worth holding onto because there are currently only four million Bitcoins left to be mined. This means that Bitcoin will inevitably become scarcer in the future which should, in turn, boost its value. It’s also a very easy investment strategy, and it’s totally recommended for people that don’t want to get too worked out with daily trading (which can be a bit stressful).
Short-term day trading
There are those who like to take a more active approach to crypto investing. This strategy is called day trading, and it involves a lot more risks and a lot more proactivity, not to mention time, than the previously mentioned method. It requires traders to actually understand the market’s movements and flows, and it has practically nothing to do with HODLing their funds.
These types of investors will check the market daily, and will most likely be up to date with all the latest happenings in the crypto sphere. What’s more, it’s not uncommon for these types of traders to use a wide range of trading tools (such as trading bots). Day traders thrive within the volatility of the market. The strategy itself is quite straightforward as it involves you having to sell your Bitcoin at the beginning of a market drop only to perfectly pinpoint when to repurchase the Bitcoin at a lower price once the market hits bottom.
Combine all methods
It’s possible that the best investment strategy is actually to combine the tactics above into one hybrid strategy. It may pay off to hold onto your Bitcoin until you see major market adjustments. This means you will have to steer off speculation, and do everything in your power to keep the FUG (fear, uncertainty, and doubt) as far away as possible.
Another handy advice is to keep an eye on the trading activity of the so-called “crypto whales.” For those of you new to the crypto space, it’s worth noting that almost half of all Bitcoin in existence is held by somewhere around 1,000 people. This means that each time one person makes a move, the entire market is bound to shift or respond. In short, whales can affect the price of Bitcoin quite dramatically.
As a general conclusion, you should always try to figure out what the best strategy method for you is. Of course, you can copy the examples of respected figures in the field, but it’s important to note that your situation might be completely different from theirs. Having said that, it all comes down to learning what kind of crypto investor you want to be. It’s important to put a lot of thought into this aspect before actually committing to big investments into volatile assets such as Bitcoin.