Is It Too Late to Buy Bitcoin? Here’s What the Experts Think

by Rachel McIntosh
  • BTC is pushing a new all-time high. Is now the best time to buy?
Is It Too Late to Buy Bitcoin? Here’s What the Experts Think
FM

Every time that Bitcoin reaches a new all-time high, people start to talk, and, almost inevitably, a single thought flashes across the minds of those who are not seasoned Bitcoiners (and, let's face it, some seasoned Bitcoiners as well):

Should I buy Bitcoin right now?”

Indeed, no matter how many times you may have heard the words “buy low, sell high,” the temptation can be strong. After all, as Rubix Chief Executive, Andrew Hamilton told Finance Magnates, “the best time to buy [Bitcoin] is always yesterday.”

Rubix Chief Executive, Andrew Hamilton.

The pull can be so strong: when Bitcoin is doing well, it is almost as if the moments when Bitcoin has suddenly crashed and burned are gone and forgotten, and if the belief is that Bitcoin will eventually be worth $100,000, then $30K may not seem like such a bad price.

Still, the eternal question remains: when is the right time to buy Bitcoin? Is it better to buy Bitcoin immediately (yesterday, in fact)? Or is it better to wait to see if Bitcoin will crash, and then buy in at a 'discount'?

Or is it too late to buy Bitcoin altogether?

Risk Factors Vary Widely Depending on Investor Profiles

There are a few important things to consider here.

For example, the difference between BTC=$15,000 and BTC=$30,000 as a point of entry may not make such a huge difference for institutional investors or for some high-net-worth retail investors.

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This is particularly true if the belief is that Bitcoin will eventually be worth $100,000 or more; a few crashes and bumps along the road to $100,000+ may not make such a huge difference to someone who has more than, say, $50,000 in extra cash to risk on a Bitcoin investment.

However, if the average Bitcoin retail investor is anything like the average person, even a small Bitcoin investment can be dangerous to one’s financial wellness.

For the 'Average' Retail Investor, Buying into Bitcoin during Ath Season Could Be Particularly Risky

But who is this 'average person' and what do they look like, financially speaking? (Keep in mind that this is not only important for retail investors themselves to consider, but also for the companies and platforms that primarily serve retail investors.)

Let’s look at some figures: in the United States (which is the largest Bitcoin user base in the world), the Federal Reserve reported in 2018 that 39% of Americans do not have enough money on hand to cover a $400 emergency. (Keep in mind that this is two years before the coronavirus pandemic brought massive economic fallout to the United States.)

Additionally, a survey by the Motley Fool published in September of 2020 found that 56% of Americans have $5,000 or less in savings, while a third of Americans have $1,000 or less.

Therefore, for the average retail investor, buying Bitcoin at any time could be a bit of a risk. But, is it particularly risky for a retail investor to buy Bitcoin when BTC is pushing all-time high levels?

How Low Could Bitcoin Go?

The truth is that it is impossible to know. After all, most of us cannot predict the future. Bitcoin could crash to $5,000 tomorrow, but it could also rise to $100,000.

And indeed, Joaquim Matinero Tor, a cryptocurrency observer and Blockchain Associate at Roca Junyent, previously told Finance Magnates that he expects Bitcoin to fall under $18,000 before making significant movement upward.

“I think the price of Bitcoin will fall under 18,000 dollars and then rise back,” he said. “Whale investors will sell once the financial year is over. So, January may be a rollercoaster ride for the cryptocurrency market.”

But, how low could Bitcoin go? Ramp Capital pointed out on Twitter that “Bitcoin would have to drop 50% from here just to get back $16,500 — the level hit on Thanksgiving 2020.” (Keep in mind that this is not entirely unlikely: Bitcoin has previously lost more than half of its value on multiple occasions.)

”Even My Hairdresser Was Talking about [Bitcoin.]”

And historically speaking, buying into Bitcoin at moments of new all-time highs could be particularly risky.

Take late 2017, when Bitcoin previously hit an all-time high. From mid-December 2017 to early February 2018, Bitcoin crumbled from nearly $20,000 to roughly $6,550. BTC did not reach $20,000 again for another three years. During those three years, there were several instances in which Bitcoin rose and then lost more than half its price.

To illustrate this point further, investor, entrepreneur, and author, Shanka Jayasinha told Finance Magnates a short tale that took place in December 2017.

Investor, Entrepreneur, and Author, Shanka Jayasinha.

When Bitcoin hit its previous all-time high in 2017, “even my hairdresser was talking about it,” Jayasinha told Finance Magnates, a factor that he says he found “highly worrying.”

Why would this have been a concern? Assuming that the hairdresser was not, in fact, a seasoned Bitcoiner, Jayasinha believed that the fact that so many people outside of the 'usual' Bitcoin sphere were talking about Bitcoin’s rise could have been a signal that the price was inflated by hype and FOMO (fear of missing out).

The Best Time to Buy Bitcoin? “When No One Is Talking about It.”

As it turns out, Jaysinha was right. “Suddenly, the same night, cryptos crashed,” he said. Luckily for Jayasinha, the conversation with the hairdresser prompted him to quickly cash out of the market before disaster struck. (Of course, many others were not so fortunate.)

“Therefore, in my eyes, the best moment to buy Bitcoin is when it is calm, when no one is talking about it,” he said.

Similarly, Akram Assaf, Co-Founder at Bayt.com, told Finance Magnates that retail investors “[shouldn’t] invest when [they] hear about it on the news.”

“Bitcoin jumps often,” he said. The best time to buy may be “when you see it dropping.”

(In other words, now may not be the best time.)

The Last Time Bitcoin Reached an All-Time High Was in Late 2017. Is This Time Different?

Then again, perhaps now is the best time.

Despite the fact that BTC’s last all-time-high in late 2017 ended in tears, a number of analysts argue that this price run is different.

Brandon Mintz, Chief Executive of Bitcoin ATM network, Bitcoin Depot, told Finance Magnates that unlike last time, the run to the new all-time high is driven in large part by institutional investment in Bitcoin: “we’re seeing fresh stories about institutional crypto adoption on almost a daily basis at this point,” he said.

Brandon Mintz, Chief Executive of Bitcoin Depot.

“[...] Sustained growth is likely from here, at least for the time being. We are being driven by corporations and billionaires now, not just retail investors.”

Mintz also pointed to the fact that market conditions outside of Bitcoin are very different than they were in late 2017. In 2020, the COVID-19 pandemic caused the United States government to print trillions of dollars, a factor that many believe will lead to inflation and possibly financial crisis over the long-term.

“The scarcity of BTC compared to the printability of dollars is likely to attract savvy individuals looking to diversify their assets in the event of a lapse in the traditional financial system,” Mintz told Finance Magnates.

“As the adoption rate of BTC increases and the supply remains constant, the value of BTC will only continue to rise.”

Additionally, Mintz believes that “BTC is moving out of the early adopter phase, with big players choosing it as a hedge against traditional markets, and consumers beginning to use it for everyday life transactions.”

“Soon enough it will become a core part of every investment firm`s portfolio and a common payment method. In 2020 and beyond, BTC will be impossible to ignore.”

“The Problem with Trying to Wait for Market Corrections Is They May Not Happen at the Time You Want or at the Price You Want.”

Although, if Bitcoin does keep growing over the long-term, it is still likely that there will be some dips along the way, moments that could be prime opportunities for investors to jump into Bitcoin at a 'bargain' price.

However, “the problem with trying to wait for market corrections is they may not happen at the time you want or at the price you want,” said Alex Treece, Co-founder at Zabo, to Finance Magnates.

Indeed, Treece said that the most important thing to consider when investing in Bitcoin is not necessarily when to enter the market. Instead, the long-term strategy is the most important factor, particularly when it comes to planning investments.

“People should take a long term view with Bitcoin,” Treece said. “Trying to time the market is extremely difficult (if not impossible) for even the most sophisticated investors.”

“If you buy into the longer-term viewpoint that Bitcoin is a highly attractive, digital store of value, then right now is a good time to buy in the context of a multi-year investment horizon.”

Borys Pikalov, Co-founder of Stobox.io, also told Finance Magnates that “whether or not to buy Bitcoin depends on your investment horizon.”

Borys Pikalov, Co-founder of Stobox.io.

“The short-term rise is unstable,” he said. “Many institutions who initiated the bull run below $25k have already made sizable profits and may liquidate their positions anytime.”

“However, in the long-term, there is still potential for the total increase in the market cap as BTC will be further recognized as a store of value by more conservative institutions and even corporations.”

What do you think about where Bitcoin is headed next? Let us know in the comments below.

Every time that Bitcoin reaches a new all-time high, people start to talk, and, almost inevitably, a single thought flashes across the minds of those who are not seasoned Bitcoiners (and, let's face it, some seasoned Bitcoiners as well):

Should I buy Bitcoin right now?”

Indeed, no matter how many times you may have heard the words “buy low, sell high,” the temptation can be strong. After all, as Rubix Chief Executive, Andrew Hamilton told Finance Magnates, “the best time to buy [Bitcoin] is always yesterday.”

Rubix Chief Executive, Andrew Hamilton.

The pull can be so strong: when Bitcoin is doing well, it is almost as if the moments when Bitcoin has suddenly crashed and burned are gone and forgotten, and if the belief is that Bitcoin will eventually be worth $100,000, then $30K may not seem like such a bad price.

Still, the eternal question remains: when is the right time to buy Bitcoin? Is it better to buy Bitcoin immediately (yesterday, in fact)? Or is it better to wait to see if Bitcoin will crash, and then buy in at a 'discount'?

Or is it too late to buy Bitcoin altogether?

Risk Factors Vary Widely Depending on Investor Profiles

There are a few important things to consider here.

For example, the difference between BTC=$15,000 and BTC=$30,000 as a point of entry may not make such a huge difference for institutional investors or for some high-net-worth retail investors.

Open a Trading Account Today with These Recommended Brokers

This is particularly true if the belief is that Bitcoin will eventually be worth $100,000 or more; a few crashes and bumps along the road to $100,000+ may not make such a huge difference to someone who has more than, say, $50,000 in extra cash to risk on a Bitcoin investment.

However, if the average Bitcoin retail investor is anything like the average person, even a small Bitcoin investment can be dangerous to one’s financial wellness.

For the 'Average' Retail Investor, Buying into Bitcoin during Ath Season Could Be Particularly Risky

But who is this 'average person' and what do they look like, financially speaking? (Keep in mind that this is not only important for retail investors themselves to consider, but also for the companies and platforms that primarily serve retail investors.)

Let’s look at some figures: in the United States (which is the largest Bitcoin user base in the world), the Federal Reserve reported in 2018 that 39% of Americans do not have enough money on hand to cover a $400 emergency. (Keep in mind that this is two years before the coronavirus pandemic brought massive economic fallout to the United States.)

Additionally, a survey by the Motley Fool published in September of 2020 found that 56% of Americans have $5,000 or less in savings, while a third of Americans have $1,000 or less.

Therefore, for the average retail investor, buying Bitcoin at any time could be a bit of a risk. But, is it particularly risky for a retail investor to buy Bitcoin when BTC is pushing all-time high levels?

How Low Could Bitcoin Go?

The truth is that it is impossible to know. After all, most of us cannot predict the future. Bitcoin could crash to $5,000 tomorrow, but it could also rise to $100,000.

And indeed, Joaquim Matinero Tor, a cryptocurrency observer and Blockchain Associate at Roca Junyent, previously told Finance Magnates that he expects Bitcoin to fall under $18,000 before making significant movement upward.

“I think the price of Bitcoin will fall under 18,000 dollars and then rise back,” he said. “Whale investors will sell once the financial year is over. So, January may be a rollercoaster ride for the cryptocurrency market.”

But, how low could Bitcoin go? Ramp Capital pointed out on Twitter that “Bitcoin would have to drop 50% from here just to get back $16,500 — the level hit on Thanksgiving 2020.” (Keep in mind that this is not entirely unlikely: Bitcoin has previously lost more than half of its value on multiple occasions.)

”Even My Hairdresser Was Talking about [Bitcoin.]”

And historically speaking, buying into Bitcoin at moments of new all-time highs could be particularly risky.

Take late 2017, when Bitcoin previously hit an all-time high. From mid-December 2017 to early February 2018, Bitcoin crumbled from nearly $20,000 to roughly $6,550. BTC did not reach $20,000 again for another three years. During those three years, there were several instances in which Bitcoin rose and then lost more than half its price.

To illustrate this point further, investor, entrepreneur, and author, Shanka Jayasinha told Finance Magnates a short tale that took place in December 2017.

Investor, Entrepreneur, and Author, Shanka Jayasinha.

When Bitcoin hit its previous all-time high in 2017, “even my hairdresser was talking about it,” Jayasinha told Finance Magnates, a factor that he says he found “highly worrying.”

Why would this have been a concern? Assuming that the hairdresser was not, in fact, a seasoned Bitcoiner, Jayasinha believed that the fact that so many people outside of the 'usual' Bitcoin sphere were talking about Bitcoin’s rise could have been a signal that the price was inflated by hype and FOMO (fear of missing out).

The Best Time to Buy Bitcoin? “When No One Is Talking about It.”

As it turns out, Jaysinha was right. “Suddenly, the same night, cryptos crashed,” he said. Luckily for Jayasinha, the conversation with the hairdresser prompted him to quickly cash out of the market before disaster struck. (Of course, many others were not so fortunate.)

“Therefore, in my eyes, the best moment to buy Bitcoin is when it is calm, when no one is talking about it,” he said.

Similarly, Akram Assaf, Co-Founder at Bayt.com, told Finance Magnates that retail investors “[shouldn’t] invest when [they] hear about it on the news.”

“Bitcoin jumps often,” he said. The best time to buy may be “when you see it dropping.”

(In other words, now may not be the best time.)

The Last Time Bitcoin Reached an All-Time High Was in Late 2017. Is This Time Different?

Then again, perhaps now is the best time.

Despite the fact that BTC’s last all-time-high in late 2017 ended in tears, a number of analysts argue that this price run is different.

Brandon Mintz, Chief Executive of Bitcoin ATM network, Bitcoin Depot, told Finance Magnates that unlike last time, the run to the new all-time high is driven in large part by institutional investment in Bitcoin: “we’re seeing fresh stories about institutional crypto adoption on almost a daily basis at this point,” he said.

Brandon Mintz, Chief Executive of Bitcoin Depot.

“[...] Sustained growth is likely from here, at least for the time being. We are being driven by corporations and billionaires now, not just retail investors.”

Mintz also pointed to the fact that market conditions outside of Bitcoin are very different than they were in late 2017. In 2020, the COVID-19 pandemic caused the United States government to print trillions of dollars, a factor that many believe will lead to inflation and possibly financial crisis over the long-term.

“The scarcity of BTC compared to the printability of dollars is likely to attract savvy individuals looking to diversify their assets in the event of a lapse in the traditional financial system,” Mintz told Finance Magnates.

“As the adoption rate of BTC increases and the supply remains constant, the value of BTC will only continue to rise.”

Additionally, Mintz believes that “BTC is moving out of the early adopter phase, with big players choosing it as a hedge against traditional markets, and consumers beginning to use it for everyday life transactions.”

“Soon enough it will become a core part of every investment firm`s portfolio and a common payment method. In 2020 and beyond, BTC will be impossible to ignore.”

“The Problem with Trying to Wait for Market Corrections Is They May Not Happen at the Time You Want or at the Price You Want.”

Although, if Bitcoin does keep growing over the long-term, it is still likely that there will be some dips along the way, moments that could be prime opportunities for investors to jump into Bitcoin at a 'bargain' price.

However, “the problem with trying to wait for market corrections is they may not happen at the time you want or at the price you want,” said Alex Treece, Co-founder at Zabo, to Finance Magnates.

Indeed, Treece said that the most important thing to consider when investing in Bitcoin is not necessarily when to enter the market. Instead, the long-term strategy is the most important factor, particularly when it comes to planning investments.

“People should take a long term view with Bitcoin,” Treece said. “Trying to time the market is extremely difficult (if not impossible) for even the most sophisticated investors.”

“If you buy into the longer-term viewpoint that Bitcoin is a highly attractive, digital store of value, then right now is a good time to buy in the context of a multi-year investment horizon.”

Borys Pikalov, Co-founder of Stobox.io, also told Finance Magnates that “whether or not to buy Bitcoin depends on your investment horizon.”

Borys Pikalov, Co-founder of Stobox.io.

“The short-term rise is unstable,” he said. “Many institutions who initiated the bull run below $25k have already made sizable profits and may liquidate their positions anytime.”

“However, in the long-term, there is still potential for the total increase in the market cap as BTC will be further recognized as a store of value by more conservative institutions and even corporations.”

What do you think about where Bitcoin is headed next? Let us know in the comments below.

About the Author: Rachel McIntosh
Rachel McIntosh
  • 1509 Articles
  • 52 Followers
About the Author: Rachel McIntosh
Rachel is a self-taught crypto geek and a passionate writer. She believes in the power that the written word has to educate, connect and empower individuals to make positive and powerful financial choices. She is the Podcast Host and a Cryptocurrency Editor at Finance Magnates.
  • 1509 Articles
  • 52 Followers

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