When is the Right Time to Buy Cryptocurrencies?

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

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

Some possible scenarios

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

Oh! So buying a year ago was not a good time. 3 years ago yes. Depends

First of all, no one (NO ONE) knows how the price will move in the short term. There are very, very smart people out there doing this. They use extremely implausible mathematical models. And the best they can come up with is the odds. They say, “It will probably go up.” But many times, they are wrong. So, as a consequence, they use strategies that allow them to limit losses. They are professionals whose success depends on getting it right. However, it is common for them to make mistakes.

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

This is the great illusion that always leaves out the extra cautious.

When the price was $30,000 you didn’t buy. Our stats say that if the price dropped to $30,000 again, you still wouldn’t buy. You think you would, but it’s an illusion. If the price fell to that level, you would wonder if it will continue to fall. As a consequence, you will lose the opportunity again.

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

New to Crypto: What You Need to Know

Let’s do an exercise. Suppose you have $1,200 to invest per year. Maybe you can always buy at the lowest points and never be wrong (an inexperienced trader is wrong more than half the time). Still, it would be more profitable to just buy 100 each month, never looking at the price (at Buda.com you can automate that process).

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

“Buy the Dip” means to buy every time the price drops. The red dots on the blue line.

DCA (dollar cost averaging) means buying regularly regardless of price.

As you can see, in the long term with the DCA strategy, the investor manages to earn more than buying the dips. And ‘buying the dips’ means that he managed 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 that the technology and the phenomenon of cryptocurrencies are here to stay, go ahead. Invest a responsible and long-term amount. Those who bought in December 2017, when the price was almost close to $20,000, had losses for almost 3 years. But today they are at 100% of their investment.

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

-In just 12 years Bitcoin became the national currency. The currency of El Salvador.

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

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

-Multiple publicly traded companies hold bitcoin in their reserves.

-The legends of Wall Street believe that it is 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 growth continues, Bitcoin will surpass one billion users by 2025.

If you are not a professional, this is the news you should be watching. And if that seems like enough of an argument to you, we recommend you invest calmly: in the long term.

As an interesting fact, 99.9% of people who have invested in Bitcoin and who have had the cryptocurrency for four years are positive.

Are you new to crypto? Do you have something to say about it, or something else? write us or join the discussion on our telegram channel.


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