Should You Buy Bitcoin Right Now? – An Expert Opinion.
As Bitcoin goes through its ups and downs over the years, the question on everyone’s mind is whether this is the right time to buy.
"Hey Jean, do you think this is a good time to buy myself some Bitcoin?"
My inbox has been flooded with slight variations of this question, so I wrote this article to help my friends, Binance family, and the general public process this decision and arrive at an informed decision.
I am a strong believer in the long-term future of Bitcoin due to its fundamental properties, which we’ll delve into later in this article. I have therefore been happy to buy at any price point since Bitcoin’s inception, as I think the price has a long way to go still and we’re in the early years of crypto, comparable to watching the dawn of commercial internet usage in the mid to late 90s.
I consider Bitcoin to be the best investment of our lifetime and will do my best to explain why I think so in the rest of this article.
How to Get Started with Bitcoin.
I know you might now have time or even sufficient interest to read the rest of this long article, so again, if you’re already convinced about buying, here are my basic recommendations for entering the Bitcoin space.
In the meantime, if you’re already convinced and you came here looking for the best places to buy Bitcoin right away, here’s what you need to do next:
There are hundreds of places you can buy Bitcoin from, but I would suggest that you stick to the exchanges that have been established for many years and have a perfect security track record. It’s important that these exchanges are regulated where applicable. These are my recommendations:
– the exchange with the biggest volume worldwide) – read my review – the biggest Euro volume exchange – read my review.
They are the world’s safest, biggest and most reputable exchanges and you can’t go wrong with them.
I’ve also written a guide on how to buy Bitcoin in Europe where I go into further detail on how you can get your hands on some Bitcoin.
Once you have your Bitcoin, you can purchase a Ledger Nano to store that Bitcoin offline and away from any hackers.
If you’re more inclined to trading, you can check out platforms like eToro or Bitfinex.
If you just want to hold your Bitcoin while earning good returns, you can check out some crypto platforms that offer a savings account. My favorites at the moment are BlockFi and YouHodler, but you can learn more about those options here.
Towards the end of the article, I will again discuss some of the ways that you can make money with Bitcoin.
Waiting to Buy the Dip.
By far the most frequent follow-up question I get and the biggest block I see people facing, is this:
"What price should I buy at?"
I don’t believe in timing the market on any investment, unless there is a big macro event like the financial crisis of 2007-2008 and the COVID dip of March 2020.
Therefore, for cryptocurrency any investment I make, I’m typically looking 5-10 years ahead and thinking about how much value that investment can generate within that timeframe. The whole crypto space is still in its infancy, and Bitcoin has enormous room for growth, thus any price point is a good entry in my opinion.
I think we’ll be seeing many more similar tweets in the coming months and years:
Unfortunately, people are really attracted to the idea of buying the dip. The problem is that the dip may never come, and if you know people who did buy some dip, it’s likely that they were in a position to buy at an even lower price a few months earlier but didn’t have the courage to pull the trigger. If that’s not the case, in 90% of the cases I would attribute managing to buy a dip to pure luck.
Even in the case of the major macro events like the 2007 crisis and March 2020 dip, to make the most of those events you’d have had to have a lot of spare cash lying around and ready to be invested. Again, mostly, a question of luck.
However, if you feel uncomfortable about choosing a particular price point to make your entry, consider investing a fixed amount periodically, say every month. In that way, you’ll smooth out any drastic price variances and you’ll be building up your Bitcoin portfolio over time. The disadvantage of that strategy is that Bitcoin might make a sharp move upwards in the meantime.
Ok, with those preliminary recommendations out of the way, let’s proceed with the reasons why I think Bitcoin is the best investment of our generation.
Why am I Bullish on Bitcoin?
In 2020, as a response to the COVID fears, Bitcoin dipped heavily in March and I had thought it was a great time to increase one’s Bitcoin holding, as the market was ruled by fear.
Since then, the price has risen steadily, breaking through its former all-time high in a dramatic way. As always, since we are still early, there are wild swings up and down, and that’s to be expected for BNB an emergent asset class.
Before we continue, let me reiterate that nobody can predict Bitcoin’s price, and neither can I. Even if I had some hunch, I would not want you to blindly follow what I say, because I am against getting financial advice online.
However, I use this blog as my own small space to think about things, btc
and writing is how I best formulate my ideas. As an added benefit, I get to interact with other investors and people whose ideas contrast mine, thus helping me further refine my thoughts.
The way I see it, Bitcoin seems to be following the stock-to-flow model when we view its price over the long term. Proponents of this model had predicted that the price of Bitcoin should reach somewhere between $100k and $200k at some point in the next few years. This is based on an analysis of the demand and scarcity of this asset, and comparing it to other assets like gold.
This is a very bullish target price, although it does seem realistic given Bitcoin’s ATH. Irrespective of the price swings, I remain very bullish on the Bitcoin network long-term, due to the fundamentals being stronger than ever.
Let’s now consider a few major themes that add to the bullish argument for Bitcoin.Bitcoin
’s track record VS the S&P500.
Bitcoin has been the best investment asset within the past 10 years by a long stretch. Take a look at how it outperformed the S&P500 index during the past few years:
However, even with such a historical track record in place, I would suggest looking beyond the charts. The basis for my investment is a philosophical one based on my belief that Bitcoin solves a need as a totally independent store of value that is not at the mercy of any government or company. I am happy to invest some of my net worth in cryptos for this reason, and I know that I’ll be happy about my decision in the future whether prices rise or fall, as it is based on that reasoning and not just speculation.
Bitcoin as a Safe Haven.
The US federal reserve printed ungodly amounts of dollars in 2020 and then pumped into traditional financial markets last year to keep them from faltering. The European Union followed suit. It’s quite logical that with more money in the system, the value of your existing stash will lose value as money is less scarce than it was before. Bitcoin on the other hand maintains its hard cap on the total amount that can ever be issued.
Hence we get a chart like this, where fiat currencies unequivocally lose value against hard assets like Bitcoin.
Big institutions and corporate entities have understood this very well. In fact, their main play is that of protecting their financial reserves, rather than buying Bitcoin in the hope of exponential growth.