With the price of Bitcoin falling significantly below $100,000 once again, “buy the dip” fans are out in full force.
But I’m here to offer a different point of view, which is simply this: Don’t buy the dip.
Before I continue, let me clarify that nothing I write in this article is investment advice.
Why would I say such a thing? Do I suddenly hate Bitcoin?
no.
I have other reasons for making such a statement.
The first is that I am trying to prevent you from becoming Liquidity exit For people like this:
Don’t worry, guys.
The rednecks are coming. pic.twitter.com/1YL8keRHYa
– BreadMan (@BTCBreadMan) January 8, 2025
The second is that I like to buy Bitcoin when it is actually selling at a discount, not just when it appears to be selling at a discount.
Let me explain.
Currently, Bitcoin is trading at about 13% from its all-time highs. While this may be a significant discount on an asset in the world of traditional finance, it is nothing more than daily volatility in the world of Bitcoin.
In four-year Bitcoin cycles, the price of Bitcoin tends to rise significantly during the years following its halving. Then the following year tends to be very bad for the Bitcoin price. During that year, the price of Bitcoin reaches a low, which tends to be in the range of the previous cycle’s high.
That was a little confusing, so let me give you an example.
In 2022, the last “absolutely terrible” year, Bitcoin’s price fell to around $15,500, which is actually about $3,500 less than Bitcoin’s highest price in the previous cycle — $20,000.
If something similar happens in 2026, we will see Bitcoin price at around $53k (23% below the previous cycle’s all-time high of $69k). Now, this would be a huge discount and a dip worth buying.
I don’t share this perspective to discourage you from continuing with something like a dollar-cost averaging Bitcoin investment strategy (one of the best strategies available to the average retail investor). Instead, I’m sharing it because if a loved one came to me and asked me if now was a good time to buy Bitcoin, I would say “not really.”
I try to maximize the financial upside (in terms of fiat currencies) of investing in Bitcoin as much as possible for those who ask me about investing in it – especially those who are new to it. Although I could probably help someone trade in and out of a Bitcoin position in the next year or so, I don’t like doing that, because I encourage people to buy Bitcoin and hold it for the long term.
But, Frank, the United States may announce… Bitcoin Strategic Reserve Other countries may follow suit! And look at all Companies that buy Bitcoin for their Treasuries!
Yes, these things happen, and so do things Bhutan sells bitcoin So do things like Germany, which sells Bitcoin, and Tesla, which sells Bitcoin.
So far, all Bitcoin price cycles have been similar. So, while it looks like we have another year of upside in Bitcoin prices, I think we will fall much lower than the current price level when the tables turn.
That’s when I will proactively buy.
This article is a takes. The opinions expressed are entirely those of the author and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.
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