Cryptocurrency is a wild ride — a thrilling rollercoaster of highs and lows, with shocking surges followed by stomach-churning crashes. Bitcoin’s price is $52,000 as of this post!
YouTube, Twitter, and Reddit tell you to make money now, FAST, and cash out with massive gains.
What altcoin is about to explode? What’s the best narrative for 2024?
Sounds great. Who paid them for that?
No time to panic
Guard against the temptation of buying a significant amount of cryptocurrency at current prices, especially when history has shown us that better opportunities may lie ahead.
This market always has downswings of 30 to 50% once or twice each year. Sometimes, these downswings can last months. Save your money for those times.
Mark, You’re telling us not to buy? It’s the start of a massive bull market!
What?
I literally just said to buy some crypto. The bull market started in November 2022.
It’s ok. You never get a bad price on bitcoin. No altcoin is worth its price today, but some will go much higher in the future.
I’m a firm believer in the transformative power of blockchain technology and the potential of cryptocurrencies to revolutionize finance. I am even more bullish on the investment opportunity. That’s something you can’t get with any other asset class.
However, I also recognize the importance of timing and strategic decision-making in this volatile market.
Let’s take a step back and look at the bigger picture.
Keep it simple
Bitcoin and other cryptocurrencies seem destined to reach new all-time highs any day now. It’s easy to get caught up in the FOMO and feel the urge to jump on the bandwagon before prices climb even higher.
Here’s the thing: the crypto market is notoriously unpredictable, and what goes up must eventually come down.
That’s not to say that prices won’t continue to rise in the short term. They very well might. There’s just not that much more room to go up. That parabolic rise doesn’t have a lot of room left.
Maybe 50% on bitcoin? 200% to 800% on altcoins?
That’s less than you got last year and far less than you’ll get once the market settles down.
Buying at current prices carries inherent risks, especially if you’re investing a significant portion of your portfolio. Markets move in cycles. When you rush to buy at the booms, you risk being left holding the bag when they bust.
Consider adopting a more measured approach.
Wait for prices to drop. “Consolidations” or “corrections,” as the traders say.
When you do that, you position yourself to capitalize on better prices in the future. A drop to $35,000 wouldn’t even break the uptrend we started in November 2022, but you’d get a lot more crypto for your money.
One strategy to consider is dollar-cost averaging (DCA), where you invest a fixed amount of money at regular intervals regardless of market conditions.
This reduces the risk of buying the peaks while also taking advantage of opportunities to accumulate crypto at lower prices during downturns.
It’s proven effective in all upward-trending markets. It’s an objectively powerful way to invest.
A man a plan a canal . . .
Another approach that beats dollar-cost averaging without extra work or timing the market?
With my plan, you’re up 850% at best, but more likely up about 110% with cash to spare. At worst, you’re even on your investment.
On average, you get 30% more crypto with my plan than you get with dollar-cost averaging for the same amount that you put into the market, without trading or timing prices.
The basic premise: buy low and grow.
This seems backward. Traders would never buy an asset when it crashes. “Don’t catch a falling knife.” Wait for a “break of resistance.”
Oh well. The results speak for themselves. You can see for yourself in the chart that goes along with my plan.
You may feel the urge to buy cryptocurrency at today’s prices.
With so much upside, you can wait for opportunities to come. A little patience and restraint can go a long way. You don’t need to chase prices as they run away from you.
Odds are, they’ll come back (if you’re patient).
Available as a collectible NFT at https://mirror.xyz.
Mark Helfman publishes the Crypto is Easy newsletter. He is also the author of three books and a top Bitcoin writer on Medium and Hacker Noon. Learn more about him in his bio and connect with him on Superpeer or Tealfeed.
