Bitcoin and BTC-halving were among the most trending keywords in the cryptocurrency sphere in Twitter this year. The past four months alone drew several investors towards Bitcoin.
Retail investors who had earlier stayed from Bitcoins joined the mad rush this year. The last BTC halving was in July 2016, following which BTCUSD gained 3000% in one and a half years.
How risky are investments in Bitcoin?
A lot of people would have heard that BTCUSD produced 8,990,000% returns in the last decade. It is equivalent to buying $100 worth of BTCUSD in 2010 and not touching that for the next ten years. That $100 investment would have grown to around $9,000,000 or $9 million.
When Bitcoin came up in 2009, it was technology way ahead of its time. Not many people understood how it could be protected or regulated. BTCUSD is still not controlled by any single entity or organization, such as a bank. Therefore, it poses an unlimited amount of risk. However, it is usually the risks taken that pay the maximum reward.
Many people who bought Bitcoin at its peak around $19,000, in 2018, are still not able to breakeven.
The right price to buy Bitcoin is…
Now that we dealt with understanding the risk associated with BTCUSD brings us to the next question: Deciding the right price to buy Bitcoins.
The answer to this question is a bit more complicated than it seems!
There is no one right price or intrinsic value for something that has:
- Negligible competition
- Negligible commercial usage
However, if we look at the daily chart for BTCUSD, we can see the large green candle on March 13, after BTCUSD dropped to $3,850. It indicates that a lot of investors waiting patiently for such a buying opportunity pounced on it!
Although, it is difficult to predict whether another such opportunity would come again any time soon. BTCUSD could be bought when it hits below $8,600. However, it is essential to understand it also depends on one’s risk appetite, with a long term (not less than three years) horizon in mind.