After halving the event, Bitcoin usually increases rapidly.
Another Bitcoin will be halved in 2028, so investors have a lot of time to prepare.
Bitcoin tends to follow a cycle of arrows and busto, so one possible attitude is a dollar average (DCA) strategy.
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Bitcoin(Crypto: BTC) The crypt for investors is very expected to hate, which is happening once every four years, and for a good reason. Usually, Bitcoin costs within 12 to 18 months after each half. For example, from 2024. April Half, for example, Bitcoin has already risen over $ 100,000 and has recently traded nearly $ 123,000.
So what happens after another Bitcoin halved, it is a preliminary plan to take place in 2028. March 30th? Will Bitcoin rise again? Or, how did some suggest that Bitcoin are no longer important? Let’s take a closer look.
Just a few months ago, some investors began to question Bitcoin halves. This is because 12 months after 2024. April Half Bitcoin increased by only 43%.
Image Source: Getty Images.
If Crypto is not a newbie yet, the 43% increase may seem impressive. But for long -term Bitcoin investors, it was extremely stunning. In fact, according to the cryptocurrency research firm Caiko, this is the worst result of Bitcoin of all time.
In 12 months after 2020 Half Bitcoin increased by 541%. Within 12 months after 2016 Half Bitcoin increased by 291%. In 12 months after 2012 Half Bitcoin increased by 7000%.
So it’s easy to see why investors were once again hoping to return the triple digit from Bitcoin after 2024. After three half -half -half, the worst result was a 291%increase!
There are some possible explanations as to why 2024 Bitcoin cut the inferior.
For example, if you are a statistician, you are claiming a sample mistake and will say that three data points (2016, 2016, 2020) are hardly enough to find a long -term trend.
If you are an economist, you will claim that macroeconomic forces such as inflation, GDP growth and interest rates are more important than everything that happens with the Bitcoin algorithm.
And if you have a financial basis, you will probably emphasize the role of institutional investors that have taken an important role in determining the price of Bitcoin. For example, in 2024. January The launch of new Spot Bitcoin stock exchange funds may have interfered with Bitcoin half -months.
All these are important points. However, the real reason for the Bitcoin subpar can be much more everyday: we are approaching the point when all Bitcoin, who will ever exist. Bitcoin’s hard cap is 21 million coins, and 19.9 million of those coins are already in circulation.
Thus, any change in the pace of the new Bitcoin supply of 2024. The most important was much smaller than in 2012, when only 10.5 million were circulating. Years. Almost twice as much Bitcoin exists today than in 2012.
I have always been thinking about Bitcoin halves half of the declining return perspective. Think about squeezing juice from lemon to get a beautiful glass of lemonade. You will get a lot of juice for the first time by compressing the lemon. You can only get a few drops to the fourth or fifth pressure. At some point, that poor lemon simply has no juice.
One common misconception of Bitcoin is that its price is only rising. However, if you look at a long -term diagram, you will immediately notice a regular series of peaks and valleys.
And, to be honest, Bitcoin tends to follow a cycle that can only be described as “boom and bust”. Every year, Bitcoin is either the best asset in the world or it is the worst. Usually what happens is that the value of Bitcoin increases from 12 to 18 months after any half, then breaks down.
And when I say “Crash”, I’m not talking about an unofficial definition of Wall Street: a quick 20% or more market downturn. I am talking about Bitcoin losing 70%, 80%or even 90%of its value until finally recovering. Buying Bitcoin for $ 120,000 and then watching it a crater is up to $ 25,000 can be difficult.
So “Should you buy Bitcoin before another half of it?” There is a little deceptive question. You should buy Bitcoin until 2028. March, as it will probably rise above the long distance.
But you do not want to buy just before a huge crushing catastrophe. This is the exact opposite of the strategy to “buy low, sell high”. You can feel so burned with cryptocurrencies that you will never want to buy Bitcoin anymore.
One possible solution is the average value of the dollars (DCA) to Bitcoin. Set aside a little money to buy Bitcoin every month, regardless of how it works. You will buy less when its value increases as it is now, but you will buy more when it has fallen on your face.
Theoretically, the DCA strategy will beautifully show you before another Bitcoin halved 2028. March
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Dominic Basult has Bitcoin positions. Motley fool is a position and recommends Bitcoin. The Motley fool has a disclosure policy.
Should you buy Bitcoin before another half of it? initially released by The Motley Fool
