With the price of bitcoin dipping well below $100k again, the “buy the dip” cheerleaders are out in full force.
But I'm here to offer a different perspective, which is simply: Don't buy the dip.
Before I continue, let me make it clear that nothing I write in this Take is investment advice.
Why would I say such a thing? Is it that I suddenly hate bitcoin?
No.
I have other reasons for making such a statement.
The first is that I am trying to keep you from being exit liquidity for people like this:
Don't worry guys.
The sky is coming. pic.twitter.com/1YL8keRHYa
— Breadman (@BTCBreadMan) January 8, 2025
The second is that I like to buy bitcoin when it's actually selling at a discount, not just when it looks like it's selling at one.
Let me explain.
Currently, bitcoin is trading about 13% off its all-time highs. While that might be a huge discount for an asset in the world of traditional finance, it's hardly more than daily change in the world of bitcoin.
In the four-year bitcoin cyclesthe price of bitcoin tends to skyrocket during the years and beyond half. And then the following year tends to be very terrible for the price of bitcoin. In that year, the price of bitcoin hits the lowest level, which tends to be in the high range of the previous cycle.
That was a bit confusing, so let me give you an example.
In 2022, the last “very terrible” year, the price of bitcoin fell to about $ 15,500, which was actually about $ 3,500 lower than the peak of bitcoin from the previous cycle – $ 20,000.
If something comparable happened in 2026, we would see the price of bitcoin at around $53k (23% lower than the all-time high of $69k in the previous cycle). Now, that would be a huge discount and a bargain worth buying.
I don't share this view to discourage you from continuing with something like the dollar cost averaging bitcoin investment strategy (one of the best strategies out there for the average sales inventory). Instead, I share it because if a loved one came to me and asked me if it was a good time to buy bitcoin, I would say “no.”
I try to explain the financial side (in terms of fiat) of investing in bitcoin as much as possible to those who ask me about investing in it – especially those who are new to it. And while I could help someone trade in and out of a bitcoin position in the next year or so, I don't like to do this, because I encourage people to buy and holding bitcoin for the long haul.
However, Frank, the US could name a Strategic Bitcoin Reserve and other countries can follow suit! And look at all companies buying bitcoin for their finances!
Yes, these things happen, and so are things like Bhutan sells bitcoin and so you have things like that Germany sells bitcoins and Tesla sells bitcoin.
So far, all bitcoin price cycles have been similar. So, while it looks like another year of bitcoin price upside is in store for us, I think we fall well below this price level when the tables turn.
And that's when I proactively shop.
This article is a Take. The views expressed are entirely those of the author and do not necessarily reflect the views of BTC Inc or Bitcoin Magazine.
