May 20, 2024

Late to the party: is it too late to invest in Bitcoin now?

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The leading crypto has experienced a meteoric rise over the past few months, with the Bitcoin price hitting a new record high of $69,170. Bitcoin’s journey from the depths of the crypto winter when its value plummeted to a disheartening $16K to the current price peak resulted in gains of nearly 300% and put the asset back on investors’ radars. 

Many factors have contributed to this stunning ascent, most notably a favorable macroeconomic context, the approval of the first spot Bitcoin exchange-traded funds by the U.S. Securities and Exchange Commission after years of resistance from the regulator, as well as the upcoming halving which is known to have a positive impact on the assets’ price performance. 

However, as this new wave of hope and optimism continues to sweep across the market, many are starting to feel a pang of regret that they haven’t invested in Bitcoin earlier when the purchase price was considerably lower. The fear of missing out (FOMO), a common phenomenon among crypto investors, is now combined with a strange feeling that the Bitcoin ship has already sailed and there’s no point in trying to jump onboard. 

A history of rags and riches  

Time is of the essence when it comes to investing. Purchasing an asset at the right moment can set you up for substantial returns while failing to do so can open you up to great losses. Bitcoin’s price history provides a relevant example in this respect. So, investors’ concern that the rising trend might be nearing its end and they missed the opportunity to enter the market and buy Bitcoin when it was still profitable to do so is more than justified. 

Bitcoin is known to follow a boom-and-bust cycle, also referred to as bull and bear markets, where its price oscillates between periods of rise and decline. This narrative repeated three times already since 2013 when the crypto king experienced its first major bull run. The coin’s price spiked from $145 to over $1,200 in less than a year. 

Back then, Bitcoin was still regarded as a mere experiment and didn’t attract much attention from investors, but those who did find the courage and inspiration to buy this novel asset recorded substantial profits during the bull market. the ensuing bear market saw Bitcoin drop from $800 to $178, wiping out a large share of investors’ funds in the process. 

In its second boom cycle, Bitcoin reached a new high of $19,500 recorded in December 2017. As its value increased, so did investors’ returns. Unfortunately, the inevitable happened and the subsequent bull market caused the asset to plummet to $3,600 by December 2018. 

Bitcoin got back on track with a new bull run in 2021, with its price gradually recovering until it hit a record high of $68,700 in mid-November. This is when shrewd investors experienced the highest earnings. As expected, the following bust cycle and the onset of the latest crypto winter resulted in the biggest losses. 

Now, after Bitcoin topped its former record, analysts predict we’re on the cusp of another bull run that could bring even larger gains, making reference to these historical patterns to substantiate their arguments. 

High expectations 

If we were to listen to experts’ predictions on Bitcoin’s price for the following months, the general consensus is that the best is yet to come, so those who haven’t purchased Bitcoin until now still have time to make a move and add the asset to their portfolios. 

Pundits base their forecasts on the impeding halving event and their association with Bitcoin bull runs. The halving is a preprogrammed process written into Bitcoin’s algorithm which ensures that the reward miners receive for validating transactions is reduced by half every 210,000 blocks until the 21 million supply cap is reached. 

A closer look at each of the past three bull markets shows that halvings follow a four-year pattern, with the price starting to gradually climb approximately 12 months prior to the halving event and then picking up pace over the following 12 months. With the next halving being expected to take place in April this year, this means we’re already in the midst of a major bull market. The fact that Bitcoin has already broken its previous record also comes to strengthen this belief and gives investors hope for further increase and bigger profits in the near future. 

However, even if the correlation between Bitcoin’s halving events and bull runs is not a mere coincidence and it does have the potential to usher in a new period of growth for the crypto leader, one should not rely on this assumption alone when making investment decisions. The crypto market is extremely volatile and there are numerous other factors that can influence its trajectory. 

Right now, the outlook for Bitcoin is positive in light of the SEC’s recent approval of spot Bitcoin ETFs and the increase in institutional participation resulting from it. But as we’ve come to learn from past experiences things can take a dramatic turn at any moment. So, whether one should buy Bitcoin or not at this point is not just a matter of making accurate price predictions and taking the leap when the value is still low in hopes of reaping the rewards later on when the asset jumps in price. 

This is a rather short-sighted view of what crypto investing entails. If you want to invest in Bitcoin, you have to develop a solid strategy based on thorough market research, calculate your risk tolerance and think long-term. This should help you decide if supplementing your investment portfolio with fresh BTC is truly worth it or not. 

author avatar
Bernard - Side-Line Staff Chief editor
Bernard Van Isacker is the Chief Editor of Side-Line Magazine. With a career spanning more than two decades, Van Isacker has established himself as a respected figure in the darkwave scene.

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