Is it too late to buy Bitcoin?
Updated: Jan 6, 2021
You may have seen Bitcoin all over the headlines with it exceeding record breaking prices over the holidays. And...you may be wondering if you missed the boat? Is it too late to get in?
The short answer, no.
The longer answer, it depends on your investment approach.
Before we get to that though, let me break down my reasoning on why right now is still a good time to get into Bitcoin. And for those who have already bought in, why it may still be a good time to continue to buy more.
You already know this, but it has to be said. This is not investment advice. This is my own personal opinion and reasoning, which I’m sharing in response to the question so many people are asking me, “Should I buy Bitcoin?”
1. It is still early days for Bitcoin. Gold has been circulating as a store of value and means of exchange for 5,000 years, fiat currencies (government-backed currencies) which have been in use for 300 years since the British Pound Sterling, and even the internet, itself, which has been in existence for 30 years... In comparison, Bitcoin is a young one at the age of 12! And is still coming into form.
2. Only about 1% of the world's population own Bitcoin. And only a handful of government and corporate treasuries are in the game. But many are starting to pay more attention. Right now, the fervor is around the institutional investors. Surprisingly, retail interest is quite low right now (based on Google Trends data), although it is picking up, and I wouldn’t be surprised if, in the next dip in price, more retail/individual investors scoop up some Bitcoin.
3. While Bitcoin has had enormous growth in a relatively short amount of time, it still has a lot more room to grow. Check out the size of the Bitcoin market cap (the total value that has been issued) in comparison to other asset classes. Just a few years ago the Bitcoin market cap was less than $100 billion and now it has more than quadrupled. We’re watching in anticipation to see how much bigger it may get in the coming years. All this to say, there is still room to get into Bitcoin.
4. Some basic maths and assumptions exist to predict Bitcoin getting to $100k and beyond. Bitcoin reaching $100k in price isn’t too far of a stretch. Some predictions are formulated by basic mathematical calculations and assumptions. This article gives some interesting examples of the different scenarios of how BTC could get to $100k.
5. People are looking for new places to safeguard their capital. Our current economic conditions have accelerated the appetite for alternatives, and so far no other contender has risen to the ranks quite like Bitcoin.
6. Unlike many other asset classes, you don’t have to buy one whole Bitcoin to get in the game. Each Bitcoin is broken down into tiny fractional units of 100 million satoshis, the smallest unit of Bitcoin. And while there is a limited supply of 21 million Bitcoin, each one is highly divisible so there is plenty to go around and you can literally get into the game with as little as $10.
Ok, now back to the long answer caveat - “Should I buy Bitcoin?” - it depends on your investment approach. This topic requires a whole other blog post and conversation (one that I’ll be covering more in depth in a workshop) but let’s talk about some basic do’s and don’ts about your investment approach:
Do:
Invest with your unique financial situation in mind.
Keep educating yourself and build your financial intelligence.
Buy Bitcoin through reputable sources, directly.
Consider investing in increments using a dollar cost averaging approach
Consider waiting for a dip in price before doing a bulk purchase.
As a beginner, take a long term approach, rather than a quick buy and sell trading approach, and invest with at least a 1 year, or better, multiple years, time horizon.
Invest in Bitcoin as part of a well diversified investment portfolio.
Don’t:
Invest more than you’re willing to lose.
Borrow money to buy Bitcoin.
Get swept up in the euphoria/mania of the market and go all in at the top (at the highest price).
Fall prey to scammers looking to offer newbie investors “too good to be true” offers of getting into Bitcoin through some kind of investment scheme.
Bitcoin is a hot and fast moving market right now, while it is currently on a bull run that’s breaking historical price ceilings, like any market, there will be corrections (decreases) in the price. Right now is a great time to get some skin in the game with dollar cost averaging so you can start building your knowledge and comfort while preparing for the next dip in the market. If you don’t know what dollar cost averaging is, do your own research or join our upcoming Bitcoin for Beginners workshop where I’ll be covering the topic and more.
Take care out there!