As the price of bitcoin dropped significantly below $100k again, the cheerleaders “bought the dip” and went all out.
But I’m here to offer a different opinion: Don’t buy the dip.
Before I continue, please make it clear that I am not writing anything in this Take investment advice.
Why would I say such a thing? Do I suddenly hate bitcoin?
No.
I have other reasons for making such a statement.
The first is that I’m trying to prevent you from being an outlet for people like these:
Don’t worry guys.
The forgotten are 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 one.
Let me explain.
Currently, bitcoin is trading at about a 13% discount to its all-time high. While that may be a significant asset discount in the world of traditional finance, it is little more than a daily fluctuation in the world of bitcoin.
In bitcoin’s four-year cycles, the price of bitcoin tends to rise significantly during and after the halving years. And then the next year tends to be very bad for the price of bitcoin. In that year, the price of bitcoin hits a bottom, which is usually at the high range of the previous cycle.
That was a bit confusing, so let me make an example.
In 2022, the last “best” year, the price of bitcoin dropped to about $15,500, which was actually about $3,500 below bitcoin’s peak from the previous cycle – $20,000.
If something comparable were to happen in 2026, we would see the value of bitcoin around $53k (23% below the previous cycle high of $69k). Now, that can be a significant discount and a dip to buy.
I don’t share this opinion to prevent you from pursuing something like the dollar cost bitcoin investment strategy (one of the best strategies out there for the average retail investor). Instead, I share it because if a loved one came to me and asked me if now is a good time to buy bitcoin, I would say “not at all.”
I try to raise the financial upside (in fiat terms) 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 even though I could probably help someone trade in and out of bitcoin in the next year or so, I don’t like to do this, as I encourage people to buy and hold bitcoin for a long time.
But, Frank, the US may declare a Strategic Bitcoin Reserve other nations may follow! And look at them all companies that buy bitcoin from their wealth!
Yes, these things are happening, so are things like Bhutan selling bitcoin and things like Germany selling bitcoin and Tesla selling bitcoin.
So far, all bitcoin price cycles are similar. So, even though it looks like we have another year of bitcoin price in store, I think we’re going much lower than this current price level when the tables turn.
And that’s where I’ll be buying more and more.
This article is a Take it. The views expressed are entirely those of the author and do not reflect those of BTC Inc or Bitcoin Magazine.