{"id":7114,"date":"2025-01-08T20:53:30","date_gmt":"2025-01-08T19:53:30","guid":{"rendered":"https:\/\/wsj-crypto.com\/?p=7114"},"modified":"2025-01-08T20:53:30","modified_gmt":"2025-01-08T19:53:30","slug":"resist-the-urge-why-you-shouldnt-snatch-up-the-bitcoin-dip","status":"publish","type":"post","link":"https:\/\/wsj-crypto.com\/index.php\/2025\/01\/08\/resist-the-urge-why-you-shouldnt-snatch-up-the-bitcoin-dip\/","title":{"rendered":"Resist the Urge: Why You Shouldn\u2019t Snatch Up the Bitcoin Dip"},"content":{"rendered":"

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Connect with Frank on X<\/a>.<\/figcaption><\/figure>\n

As the price of bitcoin has plummeted significantly below $100k once again, the \u201cbuy the dip\u201d enthusiasts are out in full swing.<\/p>\n

However, I am here to present an alternative viewpoint, which is simply: Avoid purchasing the dip.<\/p>\n

Before I proceed, let me clarify that nothing in this piece constitutes investment guidance.<\/em><\/p>\n

Why would I express such a notion? Have I suddenly developed a dislike for bitcoin?<\/p>\n

No.<\/p>\n

I have different motivations for voicing this opinion.<\/p>\n

The first is that I aim to prevent you from becoming exit liquidity<\/a> for individuals like this:<\/p>\n

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Don\u2019t worry guys.<\/p>\n

The retards are coming. pic.twitter.com\/1YL8keRHYa<\/a><\/p>\n

— Breadman (@BTCBreadMan) January 8, 2025<\/a><\/p><\/blockquote>\n

The second reason is that I prefer to acquire bitcoin when it\u2019s genuinely available at a discount rather than merely when it seems to be.<\/p>\n

Let me elaborate.<\/p>\n

Currently, bitcoin is trading about 13% lower than its all-time highs. While this may represent a substantial discount in the realm of conventional finance, it’s hardly more than a daily variation in the bitcoin market.<\/p>\n

In the four-year bitcoin cycles<\/a>, the price of bitcoin typically soars during the years of and following its halving<\/a>. Conversely, the subsequent year generally tends to be quite unfavorable for bitcoin\u2019s valuation. During that year, bitcoin’s price reaches a low, often corresponding to the previous cycle’s peak.<\/p>\n

This explanation may seem a bit convoluted, so let me provide an illustration.<\/p>\n

In 2022, the last \u201cquite unfavorable\u201d year, bitcoin’s price plunged to around $15,500, which was actually about $3,500 below bitcoin’s peak from the earlier cycle \u2014 $20,000.<\/p>\n

If a similar situation occurred in 2026, we would observe bitcoin’s price at roughly $53k (23% lower than the prior cycle\u2019s peak of $69k). That would represent a true discount and a dip worth purchasing.<\/p>\n

I do not present this viewpoint to discourage you from engaging in a dollar-cost averaging strategy for bitcoin investments (which is one of the most effective strategies for average retail investors). Instead, I share it because if a loved one approached me and inquired whether it was a good moment to buy bitcoin, I would respond \u201cnot really.\u201d<\/p>\n

I strive to maximize the financial benefits (in fiat terms) of bitcoin investments for those seeking advice \u2014 particularly newcomers to the space. And while I could potentially assist someone in trading in and out of a bitcoin position over the next year, I prefer not to do so, as I advocate for individuals to buy and hold bitcoin for the long term.<\/p>\n

But, Frank, the U.S. may unveil a <\/em>Strategic Bitcoin Reserve<\/em><\/a> and other countries might follow suit! And look at all the <\/em>companies acquiring bitcoin for their reserves<\/em><\/a>!<\/em><\/p>\n

Indeed, these events are occurring, as evidenced by instances like Bhutan cashing out bitcoin<\/a>, along with occurrences such as Germany liquidating bitcoin<\/a> and Tesla divesting bitcoin<\/a>.<\/p>\n

Thus far, all bitcoin pricing cycles have exhibited similarities. Therefore, while it appears we may have another year of appreciating bitcoin prices ahead, I anticipate that we will drop much lower than the current price point when the circumstances shift.<\/p>\n

And that will be my opportunity to buy actively.<\/p>\n

This article is a <\/em>Take<\/em><\/a>. The views expressed are solely those of the author and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.<\/em><\/p>\n