How Correct Is It to Say That It Is Always a Good Time to Buy Bitcoin?
2022-05-04 15:11:34
What Would Be The Best Moment To Buy Bitcoin Given Its Price Volatility?
As inflation progresses, people have a need to protect the value of their savings. Historically, one of the best solutions has been to buy gold, as it has managed to preserve its value over time. Individuals, institutions, and governments have begun to buy and hold gold for a long time, and they still do it today. Bitcoin recently stepped up to the top 10 most capitalized assets in the world, and considering its young age, it may be able to climb even higher. Some people consider bitcoin only as a speculative asset, whereas others as a medium of exchange. In reality, the belief that Bitcoin is much more valuable is becoming more and more prevalent, considering that long-term wallets are increasing in number. In fact, many people consider Bitcoin as an excellent reserve of value equal to gold, or even better.
One of the greatest exponents and promoters of this theory is certainly Michael Saylor, the CEO of MicroStrategy, the largest single-wallet holder of bitcoin in the world. He stated that bitcoin fundamentals make it a ‘digital property’ and that “it’s demonetizing other forms of property”. He went on explaining that the key is to hodl through periods of market downturn and uncertainty considering the fact that bitcoin price live action will always keep disappointing a number of investors somehow. If these claims are true, then we could also argue that it is always a good time to buy bitcoin.
As inflation progresses, people have a need to protect the value of their savings. Historically, one of the best solutions has been to buy gold, as it has managed to preserve its value over time. Individuals, institutions, and governments have begun to buy and hold gold for a long time, and they still do it today. Bitcoin recently stepped up to the top 10 most capitalized assets in the world, and considering its young age, it may be able to climb even higher. Some people consider bitcoin only as a speculative asset, whereas others as a medium of exchange. In reality, the belief that Bitcoin is much more valuable is becoming more and more prevalent, considering that long-term wallets are increasing in number. In fact, many people consider Bitcoin as an excellent reserve of value equal to gold, or even better.
One of the greatest exponents and promoters of this theory is certainly Michael Saylor, the CEO of MicroStrategy, the largest single-wallet holder of bitcoin in the world. He stated that bitcoin fundamentals make it a ‘digital property’ and that “it’s demonetizing other forms of property”. He went on explaining that the key is to hodl through periods of market downturn and uncertainty considering the fact that bitcoin price live action will always keep disappointing a number of investors somehow. If these claims are true, then we could also argue that it is always a good time to buy bitcoin.
Can Bitcoin Price Volatility Also Be a Positive Thing for Investors?
It is a fact that cryptocurrencies are highly volatile and that the market has not yet reached full maturity. Bitcoin, which is the symbol of this new industry, has often been attacked for that reason. However, while it may be true that volatility represents a huge risk for mid-to-short-term traders, it is also true that it can be an opportunity for long-term investors. In fact, if we all agree with what was said earlier about approaching bitcoin with a purely investor mentality, we could say that it does not really matter at what price level we buy, as long as we know what our future expectations are. If we expect this asset to grow in value over time or at least maintain its price levels, then it is always the right time to convert a small portion of our savings to bitcoin. Actually, a momentary downward volatility could be an opportunity to enter the market at a lower price than what we have set.What Could Be the Right Strategy To Adopt for Our Purpose?
There are several strategies, but one of the most effective is called 'Dollar-cost averaging’ (DCA). According to this strategy, the purchases occur regardless of the asset’s price and at regular intervals. An investor divides up the total amount to be invested across periodic purchases to reduce the impact of volatility on the overall purchase. One of the key factors is to always use platforms specialized in buying and selling cryptocurrencies, like Gate.io exchange. Its trading platform is suitable for any type of user, from a beginner to a more advanced one, and offers transparent and competitive fees.
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