With the price of bitcoin dropping significantly below $100,000 again, the “buy the dip” cheerleaders are out in full force.
But I’m here to offer a different perspective: Don’t buy the dip.
Before continuing, I would like to clarify that nothing I write in this Take is investment advice.
Why would I say something like that? Is it because I suddenly hate Bitcoin?
NO.
I have other reasons for making such a statement.
The first is that I’m trying to prevent you from becoming exit liquidity for people like these:
Don’t worry guys.
The retards are coming. pic.twitter.com/1YL8keRHYa
— Breadman (@BTCBreadMan) January 8, 2025
The second is that I like to buy bitcoin when it’s actually being sold at a discount, not just when it looks like it’s being sold at one.
Let me explain.
Right now, bitcoin is trading at about a 13% discount to its all-time highs. While this may represent a significant discount for an asset in the world of traditional finance, it is nothing more than a daily fluctuation in the world of bitcoin.
In bitcoin’s four-year cycles, the price of bitcoin tends to skyrocket during and after its halving. And then the year that follows tends to be pretty terrible for the price of bitcoin. During that year, the price of bitcoin hits a low, which tends to fall within the range of the previous cycle’s high.
That was a little confusing, so let me give you an example.
In 2022, the last “pretty terrible” year, bitcoin’s price fell to around $15,500, which was actually about $3,500 lower than bitcoin’s high in the previous cycle: $20,000.
If something similar were to happen in 2026, we would see the price of bitcoin at around $53,000 (23% lower than the previous cycle’s all-time high of $69,000). Now, this would be a significant discount and a drop worth buying.
I do not share this perspective to dissuade you from continuing with something like a dollar-cost averaging bitcoin investment strategy (one of the best strategies available to the average retail investor). Instead I share it because if a loved one came to me and asked me if now is a good time to buy bitcoin, I would say “not really.”
I try to maximize the financial benefit (in fiat terms) of investing in bitcoin as much as possible for those who ask me to invest in it, especially for those who are new. And while I could perhaps help someone trade in and out of a bitcoin position in the next year or so, I don’t like doing that, as I encourage people to buy and hold bitcoin for the long term.
But, Frank, the United States could announce a Bitcoin strategic reserve and other nations may follow suit! And look at everything companies that buy bitcoin for their treasures!
Yes, these things are happening, as well as things like Bhutan selling bitcoin and so too things like Germany selling bitcoin and Tesla selling bitcoin.
And the following announcement was made within hours of this piece’s initial publication:
ONLY IN: 🇺🇸 The US government has authorized the sale of 69,370 #bitcoin $6.5 billion worth seized from Silk Road, a federal judge has ruled. pic.twitter.com/dGB7S9iO8T
— Bitcoin Magazine (@BitcoinMagazine) January 9, 2025
Up until now, all bitcoin price cycles have been similar. So while it looks like we have another year of bitcoin price upside in store for us, I think we will fall well below the current price level when the situation changes.
And that’s when I will buy proactively.
This article is a Take. The opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.