When is the right time to buy cryptocurrencies?

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New to crypto? Is it the right time to buy? Or is it better to wait and hope the price drops a bit? This is a question that you have surely asked yourself at some point.

The opinion here is that if you have studied the subject before and believe in the phenomenon of cryptocurrencies, the best thing to do is to buy now and wait. This strategy is better than trying to find the right moment. Here’s why.

Some possible scenarios

First, and to warm things up, how much would you have today if you had bought $100 1, 3, or 5 years ago?

Ah! So buying a year ago was not the right time. 3 years ago yes. Depends.

First, nobody (NOBODY) knows how the price will move in the short term. There are very, very smart people who are dedicated to this. They use extremely wacky mathematical models. And the best they can come up with is the odds. They say, “It will probably increase. But often they are wrong. So as a result, they use strategies that allow them to limit losses. They are professionals whose success depends on doing it right. Yet it is common for them to make mistakes.

Some people say, “Bitcoin is volatile, so I should wait for it to drop a bit more to buy.”

This is the great illusion that keeps the extra-cautious always out.

When the price was $30,000, you didn’t buy. Our statistics indicate that if the price fell back to $30,000, you still wouldn’t buy. You think you would, but it’s an illusion. If the price were to fall to this level, you would wonder if it will continue to fall. As a result, you will again miss the opportunity.

We all like to buy cheap, but what’s the cost of “waiting for it to be cheaper”? It is proven that trying to beat the market is more expensive than having the discipline and buying periodically.

Newbie to Crypto: What You Need to Know

Let’s do an exercise. Suppose you have $1,200 to invest per year. Perhaps you could always manage to buy at the low points and never be wrong (an inexperienced investor is wrong more than half the time). Even so, it would be more profitable to simply buy 100 each month, never looking at the price (on Buda.com, you can automate this process).

Here is an example with 50 years of S&P500 data.

“Buy the Dip” means buying whenever the price drops. The red dots on the blue line.

DCA (dollar-cost average) means buying periodically regardless of price.

As you can see, in the long term with the DCA strategy, the investor manages to gain more than buying the dips. And “buying the dips” means you were able to guess 100% of the time when the price would stop falling. This is practically impossible, even for professionals.

Winning strategy: buy periodically regardless of the price.

Don’t try to beat the market

What we want to convey to you is the following. Don’t try to beat the market. If you think the technology and cryptocurrency phenomenon is here to stay, go for it. Invest a responsible and long-term amount. Those who bought in December 2017, when the price hovered around $20,000, suffered losses for almost 3 years. But today, they are 100% on their investment.

The important thing is not the short term, but the fundamental news on adoption, and here we have good news.

-In just 12 years, Bitcoin has become a national currency. Currency of El Salvador.

-Bitcoin is the 15th largest currency in the world, behind the Russian ruble.

-Today there are cryptocurrency companies that have a banking license. There are crypto-banks.

-Several listed companies hold bitcoins in their reserves.

-Wall Street legends believe it’s the future, like Ray Dalio or Paul Tudor Jones.

-The adoption rate of bitcoin is higher than the internet when they were the same age. As Bitcoin grows, it will surpass one billion users by 2025.

If you are not a professional, this is the news you should watch. And if that seems like a sufficient argument to you, we advise you to invest calmly: for the long term.

Interestingly, 99.9% of people who have invested in Bitcoin and have held the cryptocurrency for four years are positive.

Are you new to crypto? Do you have something to say about this, or anything else? Write to us or join the discussion in our Telegram channel.

Warning

All information contained on our website is published in good faith and for general information purposes only. Any action the reader takes on the information found on our website is strictly at their own risk.

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