My Answer to "When Should I Buy Bitcoin...?"
I'm often ask questions like "When should I buy bitcoin?"
My answer: Yes.
When you buy matters less than whether or not you buy and hold.
To be clear, it's not just about bitcoin (the currency) or Bitcoin (the protocol).
It's about cryptographically secure, immutable distributed ledgers. This is the best form of money ever invented, and it can not be manipulated or controlled by governments, banks, or corporations. If "bitcoin" itself shows weaknesses, other cryptocurrencies will increase in marketshare as we saw earlier this year.
The question isn't when you should buy. It's why you aren't buying today.
And yes, I get the chart won't always look like this. As I've said many times before, I watched bitcoin go from $1200 down to $250 in 2014 (and I didn't sell). The reason I didn't sell is because of content like this article from @falkvinge written in 2013: The Target Value For Bitcoin Is Not Some $50 Or $100. It Is $100,000 To $1,000,000. I thought it made a good argument in 2013, and I think it makes a good argument today as well. As Rick Fakvinge mentioned 4 months ago, his predictions have been quite accurate so far.
I posted this picture on Twitter and on Facebook because I realized this message needs to be repeated over and over again. Fiat currency is losing purchasing power and unless people hear about bitcoin enough to be sick of hearing about it, they won't spend the time to learn about it. If they don't learn about it, they may come to regret it in the future.
That's why I put together some videos at understandingblockchainfreedom.com. This stuff is hard to understand, but it can not only change lives, but change our world. It's worth understanding.
Less than 0.25% of the adult population currently has an investment in bitcoin. That’s less than one in 400 persons. The actual estimate is close to one adult in 800. On the other hand, a far higher percentage have heard of bitcoin. Publicity in the mainstream media is growing.
Over the last 12 months there were 1’700’000 new first time users of bitcoin, bringing the total number of bitcoin users to 5.6 million at the end of Sept 2017. That was a 43% increase in the number of first-time bitcoin owners.
Those new users together with the 3’900’000 previous bitcoin owners bought an estimated 4.6 million bitcoin. That’s an average of 0.82 bitcoins per user.
The supply of newly mined bitcoin over the last 12 months was nearly 700’000 coins. The remaining 3.9 million of supply came from existing holders, especially whales, who reduced their holdings as the price rose.
For more research like this see the blog I wrote today.
Luke, I agree with most of what you said, but what good is bitcoin at $100k if its value is directly linked to centralized exchanges that are just 1 execute order away from being shut down?
As it stands today, the exchanges are what gives bitcoin its value! Take away these centralized entities, what is bitcoin worth then?
This uncomfortable facts bothers me very much.
There are a lot of decentralized exchange projects and we have localbitcoins and BitShares. I was there in 2013 when MtGox went away. Bitcoin took a hit, but it came back strong. Bitcoin is not exchanges. It lives beyond them. As long as people want an non-manipulated way to store and transact value, there will be demand.
Exchanges are just for trading money for coloured paper.
When enough of the economy accepts bitcoin, it'll be a moot point.
Yes, why aren't you buying now is a solid response. Furthermore, any large pullback (and I'm sure there will be another) is definitely a good time.
Agreed.
If you are buying right now with the intention of selling it in 10 minutes, or tomorrow. Well, sure maybe now is not the best time to buy. Maybe you should wait 8 more minutes. lol.
Many of us who buy, do it with a longer term in focus. We buy today, and not expect to sell it for 6 months or even a year.
In this case, there is no special time to buy. Buy it while you can. :)
I have not sold even one satoshi in last 5 years ( for FIAT), and have no intentions to sell any in the next 5-7 years as well. HODLING is my religion now
Correct! Pullbacks are present in any type of security, that has an on going debate behind it.
Every month, I put a percentage of my wage aside to buy Bitcoin, Ethereum and Ripple I don't even look at the price!! I'm just looking to hold it long term as looking at the price daily is bad for the nerves ;)
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Thanks for this informative post. We are so fortunate to be in early on crypto
currency.
Loving the post with the link to the article have. I really wonder what cryptocurrency will look like in 10 or maybe even til 20 years. How it will change the Royal on how we handle money and the economy in a whole.
Indeed, bitcoin will continue to grow. I really like this part: "The question isn't when you should buy. It's why you aren't buying today."
I was resistand to buy bitcoin at $11. Then when It hit $100 dollars I though it had reached it's potential and skipped it. When It was at $1000 I again though I missed out.
Now I finally bough at $4300, should have bough earlier.
Far too many people share this exact same story. If @falkvinge and others like him are right, many more will repeat this again and again as fiat continues to lose purchasing power and cryptocurrencies continue to improve how we think about value and programmable money.
I think that even the currant "pittance" we get out of those Bitcoin fountains will be worth something someday. 10,000 Satoshi may even buy you a car!
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Sound advice. I only started in crypto about 6 months ago buying a little bit of bitcoin here and there. I tried to watch for the peaks and troughs to find the best time to buy but you are always chasing your tail with that game.
Now I have started just buying US$200 of bitcoin each week regardless and I leave the charts to blow in the wind.
Some might see this as foolish, but in the long run I believe it will be a good investment.
PS The trickier dilemma I have now is knowing when and how much of the bitcoin to move over to steem 😎
I'm in the same boat. Actually contemplating splitting my holdings exactly between bitcoin and steem on new years eve, and watching them race for a few years.
That sounds like a really fun experiment. :)
Very interesting and I'm starting to lean more and more to the crypto side of things and I certainly agree. But more than that I think in today's day and age it's become a whole other (and good) option for diversification. As an investor for years I've always been a big proponent in diversification to avoid getting hit hard in any one thing if it were to go against you. You can then diversify further into different crypto's as well. I'd still recommend any investor leave a portion of their portfolio in physical gold and silver. What say you on that last note Luke?
Great info and great post like usual!
I have a little gold and silver, but not much. I see that more as temporary disaster relief emergency fund stuff. Most likely I'll never use it though. I much prefer diversification within cryptocurrency. It's far more useful with far more potential future value, IMO.
I'm right there with you as far the disaster relieve. I lightened my holding of physical metals, as it's earns no interest, and the mney is doing better 10% APR in Ecuador CDs. I'll have a good opportunity to pull the trigger on some crypto in December when some things become liquid. So best I study up and keep following you and others in the know! Hope you are having a great holiday weekend, and that you have found some buyers for those chilis. Wow did they look good! Too bad you don't ship to Thailand, but I'd probably be off to a new destination before they got here anyway! lol