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The BEST Time To BUY Crypto!

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Avatar for Pantera
Written by   772
3 months ago

Investing in Bitcoin and cryptocurrency is lucrative, but not for all. It is unprofitable for most of the investors that as usual bought right at the top.

We enter the Crypto Universe with ambition after we read about all these stories of sudden riches.

But the result is always the same, we were late and bought the top!

The moment most of the investors enter Crypto, the price will crash since the prices will be already at unsustainable levels and no new investors will be willing to buy.

You may think that you got unlucky buying the top of a mania phase, but was it luck, or was it the system that pushes most investors to buy at unreasonable prices way above the average growth and fair value of these assets?

The market was doing great. Everyone was already super excited and spreading the message that cryptocurrency adoption was inevitable. So, you bought, with no reasoning but because you were pushed in this direction by the mainstream media and influencers on Twitter.

It happens to most of us when we first enter the unknown world of cryptocurrencies. Unless we were lucky, unless we had time to spare in this when nobody was watching and the media was focusing on other financial events, we will buy the top.

When NOT to Buy

Source of Image: Wikipedia Commons

Bitcoin rally this year is the start of going mainstream, not a bubble, says investor Bill Miller

-CNBC April 20, 2021 Bitcoin's price: $55,780 (Source)

Many retail investors will buy after watching discussions about Bitcoin on Bloomberg, CNBC, or any other financial network.

Twitter is telling you $100K is a certainty. You read about crypto on Twitter again, and there it is! Validation!.

PlanB has this amazing chart he published years ago, and it seems it is working! Right? But wait, there are so many more! This Pompliano guy has a million followers! How can he be wrong even when he is not accepting Bitcoin for his “Bitcoin Pizza” little scheme!

Celebrities are now in Crypto, it is going to be huge and you think you shouldn't miss this opportunity. Your neighbors are already in Bitcoin and Doge, your boss at work had just bought a few Ethereum and then, Musk himself is tweeting about this cute little Doge, and all the memes he posts are so popular!

Then this guy, Michael Saylor! A remarkable entrepreneur that survived the Dot-com bubble and miraculously made it to a billion-dollar net value!

Then you got Cathie Wood, Paul Tudor Jones, Mark Cuban, Bill Miller all invested in Bitcoin and giving their backing! Laser Eyes!!

Celebrities join the “fight” next! Paris Hilton, Floyd Mayweather, Snoop Dogg, Kanye West, Mike Tyson, Tom Brady!

These guys are already billionaires and are so kind to their followers that are willing to share their investment strategies!

Yes, buy Bitcoin since all these individuals had the guts to do it and are in such huge profit already. You should follow those that made it and now actively promote Bitcoin and cryptocurrency.

But as usual in crypto, 90% of investors will buy right at the top.

Dollar Cost Average they tell you - DCA

Image from: Pexels, by John Guccione)

Dollar-Cost Average, they tell you, perfect strategy!

But when they will tell you about it? When the market is already over-performing and previous rational investors are in taking-profit mode.

Yet, the financial crypto-gurus will advise you to keep buying even at extreme prices. DCA can work on stocks for decades since the bullish sentiment doesn’t evaporate easily, but it can’t apply to crypto without modifications.

The Crypto Market is more similar to penny stocks on steroids. Even the top cryptocurrencies experience extreme volatility that makes DCA a matter of correct timing.

It is not a correct approach to DCA your way in crypto after a year of a bull market. This is practically identical to buying the top. Or it is also similar to de-investing or selling at a loss when the market has dropped significantly and the chart flashes huge support levels.

How much have you made following DCA since May? Crypto is not the stock market and tricks may work, but only temporarily. Dollar-Cost Average is the way to buy after an enormous drop and for a long perios of consolidation, but will not apply to most cryptocurrencies.

However, this is all about planning. What we expect and how. When prices rise by 10x and DCA is certainly a mistake. In fact, after such a rise, those advisors that instruct you otherwise, they are misleading you and they are also the ones taking profit when telling you to keep buying.

There is finite money for retail investors. You can’t keep buying for four years to make a profit. DCA looks more like the ridiculous Martingale system some gamblers still use. It only works when there is an infinite amount of money, so it is not realistic.

When to Buy Crypto Again

Image from: Pixabay, (by Kellepics)

The right moment to buy is when you feel that this is a lost cause. You will check the prices and feel this was a disaster. Every crypto is in red for weeks and looks doomed.

When you check prices and see a market that after 80–90% from ATH is still dropping. This is when you should start buying.

When nobody is talking about Crypto, when Twitter has completely forgotten about it, and at moments when Cryptocurrency is brought as a topic in a conversation, everybody instantly dismisses it.

Maybe a year later. Right now, it is still dangerous. Some coins/tokens are down by 80% since ATH, but this is still not a good indicator to buy. They can always go down further, perhaps another 80% or 90%.

The only indicators we have about cryptocurrencies are the averages. These are not stocks to analyze sales, productivity, cost reduction, management decisions, marketing efficiency, etc.

There is no business model in any of them, the price is subject to just three factors:

  • The Network Effect

  • Marketing

  • Manipulation

There is nothing else beyond these three factors that give us a better understanding of the value of cryptocurrencies.

The Network Effect

Image from: Brave Cadet

This is the user base and the connections between users of a selected network.

Frankly, the network effect in most cryptocurrency networks is just the devs and their friends or family. Nobody is using 99% of the cryptocurrency blockchains.

Most transactions are automated, created by miners, bots, artificial, and not organic.

When calculating the network effect for Facebook, for example, can we compare this network to Ethereum? Is the same amount of people using these networks?

Our parents and grandparents are using Facebook daily. Is everyone that ever used Ethereum a daily user of it? And has Ethereum reached a point of having a billion users?

Network Economics

Image from Pixabay (by Geralt)

We evaluate networks differently according to their network effect.

Facebook, for example, applied to the masses with free services. It is a business that creates income from commercials and the sale of personal data to advertisers.

Ethereum applies to finance. It failed to reach mass adoption since, just like BTC, its network could not scale under the current development.

An enormous problem that some networks have solved (BCH) but the rest didn’t out of concerns over “centralization” and instead proceeded with other strategies (switch to digital gold).

However, Ethereum is a network that can’t sustain itself on high fees. The Ethereum community realized this and is planning with Ethereum 2.0, and lately with the London fork to improve the scalability of the network.

Network Economics is different depending on the user base of each network. In this term, Ethereum has a purpose valued higher than Facebook, thus while it doesn’t have the user base (billions of users) Facebook has, it still has the potential to grow in market cap terms above Facebook.

The value of each network is different for a single user. Eventually, if Ethereum reaches a billion users, its network valuation will be several times higher than that of Facebook.

Scalability

Image from Pixabay (by diego_torres)

Ethereum has to solve the scalability issues, otherwise, it cannot outperform the competition, and eventually, it will start declining in investing interest.

Networks require to run smoothly and execute each command instantly. Networks that are not lightning-fast today create problems in the price performance of the asset. Eventually, networks that are not offering the perfect user experience will fail to become widely adopted.

BTC is not performing either as a network. It is slow and expensive to use. And when too many people use it, fees reach some kind of astronomical level of $50 per transaction.

We don’t care about that though; we are here to invest, aren’t we?

A gross mistake since the fees rising means that the network is enjoying increased usage, but also means that this network is a failure.

Solution of the Crypto Market Puzzle

Image from: Pixabay (by PublicDomainPictures)

Staying away from crypto is the worst mistake an investor can make.

This industry today is not about BTC anymore. Networks like Bitcoin Cash, Ethereum, ZCash, XRP, Cardano, and hundreds of more, are not just creating some vague “store of value” narrative to invest into.

These networks are creating the future of finance.

Bitcoin Cash has a top-tier blockchain. Fast, cheap to use, and reliable, exactly as Bitcoin should be. It covers these features that should have been the basics and where BTC failed massively.

Ethereum has infinite possibilities, and developers create new decentralized financial instruments daily on top of it.

Sadly though, the whole cryptocurrency industry is still bound by the restraints of one only asset, Bitcoin BTC, rejecting innovation and utility.

BTC, with its boom-bust cycles, is not helping with stability, and with the extreme price fluctuations, it creates even worse conditions for the sustainability of other cryptocurrencies.

Eventually, this will change, but first investors should change their habits and their sources of information. It needs to put the importance of the cryptocurrency industry on a higher level and retail, as well as institutional investors, start behaving rationally.

Memes like Doge will not survive, its network standards are outdated (was never an innovative technology) and sadly Elon Musk has purposely created a destitute image for the whole industry.

When you should buy crypto, it is a choice you should be making. The timing is important since the market and exchange mechanisms have tied all cryptocurrencies to BTC.

I will not advise buying Ethereum at $3000 since it can easily drop to $300 again in case we enter a bear market. I am not even going to advise when to buy.

With this article, I try to make sense of this market, analyze its flaws and its advantages, and how important it is for investors to change into a mature mindset.

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Avatar for Pantera
Written by   772
3 months ago
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Comments

Thanks, your explanation is quite clear and that is why I channel all my investing to some stakeable coins like "AWC" token, which sustainable. In fact, I see AWC token as next Bitcoin in the making and based on market fluctuation, it is advisable to invest more. For info about AWC token - https://atomicwallet.io/token

$ 0.00
1 month ago

After the good impression from reading your post about Bit coin cash reaching $5000, I couldn't help but read another post. Another great content.

Many Crypto noobs invest blindly and some are guided by hypes from friend and the media. In the end they become bagholders for a lot of shitcoins. They buy because others are buying. A little research could help them make better investments. The popular strategy for buying crypto here is "Buying the dip" or as my friend often say; "buying the deeper dip".

Thank you for another good read.

$ 0.00
3 months ago

This article is very well written. But what you say is not entirely true.

It's true you should not buy Bitcoin at the top... absolutely not, but buying it at dips little by little is worth while particularly when it experienced more than 50% correction.

There is a method towards Bitcoins price rise, starting after the Bitcoin halving...that stock to flow theory that its supply reduces and demand increases comes to play.

Here is the Bitcoin Data science which everyone should study while dealing with Bitcoin.. It tells you how Bitcoin's valuation is based on different metrics , stock to flow being just one. Using that one can make decision on buying of BTC.

https://www.lookintobitcoin.com/charts/

Ethereum will not fall back to 300$, it is going to inflade because actually its network is used a lot in DEFI , NFT etc... and in future as you said its valuation will be enormous for sure!!

We have tools to invest, monitoring Bitcoin dominance and altcoin dominance and this Bull cycle is not peaked and done away with.

Also you have to see that financial climate is bad, currency inflation, possibility of currency devaluation is there so... Bitcoin is a good store of value.

I think your article is very exagerated ... You should see that momemtum is there, and if you invested in these cryptos when they dipped you will be in the green.

because BTC was 10,000$ last year, then it went to 20,000, even if you brought it at 20,000 even after the recent dip you will be in the green

Ofcourse, sane investing is required. Risk is there, but saying that crypto currency market is reached its peak now is going a bit too far. I think its ok to Dollar cost average when momentum is there...

Also only invest what you can afford to lose.

Ethereum has just crossed its first all time high, doubled it and it has a long way to go. Institutions are going to pour buying ETH, onchain data is there on Hodling behavior and acculation that happened on BTC in the recent dip.

The way to go would have been to catch on in the momentum, buy the dips, book profits, I think we all then will do ampily well.

Anyway...

Also... this is the last bull cycle that can give sizable returns for Bitcoin because it will be adopted by everyone, either FOMO or because it will be in all these investment products EFTS, pension etc... and its market cap will increase very expotentially, so its better to get your hands on it early because it gets over adopted and has less room to grow.

And I am sorry to dispute but if you brought Bitcoin 2017 this time and left it, you will be in awesome profits. If you averaged on since then you will be in profits, because that time BTC was 1000 to 1300$ levels!!

In future value of Bitcoin is going to be really high...near future. COnsider risks of holding on to fiat currency in banks. So, some folks just want to hodl on to BTCs dear life because its digital gold as its value will only increase over time.

I would definitely say BTC is a must in everyone's portfolio and buying them at dips is great and buying when there is momentum. There is lot of space for Bitcoins Price torise still, so I feel you can still buy it but monitor its price, and do things according to your finances.

Every two years it sure looks BTC surpasses its earlier highs or enters price rise phase.

Also avoid Blockchain projects that have no fundamentals...adoption rate, that's every investors responsibility.

I really think you got to see how early we are in the Blockchain space - so investing in Blockchain companies with good fundamentals are going to keep you in the green and create wealth for you in the long run not short run!!

That's all... I just feel that in current sinario its risky to invest in traditional stocks, gold is not doing that great (although its not as volatile as crypto), money can devalue so BTC is required, the more you get before it grows further the better.

Investing now... not very sure but you should have invested when Bitcoin corrected to 30,000 levels and was accumulating phase. Still its not very late, BTC will cross its ATH of 65,000 and go till 1k and in the middle you can take profits.

Bull run is not finished, far from it!! And in the long run if you just Hodl Bitcoin you will be in the green, in fact forest growth kind of green!! Anyway

$ 0.00
3 months ago

This article feels me better than before because Im so interesting to read how manage cryptocurrencies in the humanity world progression, thank you for wrote this article now I am have knowledge about crypto and how get more explosive and get more grind in my life situation now😊 keep it write like this article i hope you gonna see my comment, Thank you!😊❤️

$ 0.00
3 months ago

I can almost say that investing in btc is like gambling. I'd most likely take the risk on Etherum.

$ 0.00
3 months ago

Absolutely a great article....You really explain each and everything very clearly....before reading this article i am a little bit in confusion that how these all cryptocurrencies has actually worth But now i understand each and everything clearly... As you say Ethereum has infinite possibilities, now i will definitely purchase Ethereum that i will attain maximum benefits...

$ 0.00
3 months ago

Thanks for the kind words and I hope I helped. About Ethereum. I also said that it is worth $3000 but it could go down to $300! There is risk to take and this is up to you.

$ 0.00
3 months ago

I hope I can buy too, soon but for now I want to learn about it.

$ 0.00
3 months ago

What you say here is really important. I remember what happened in 2018. I know many people here in Venezuela who were carried away by what the media and influencers said, many people buying mining equipment and investing. And silly influencers because they have no other qualifier and other opportunists that told people to sell all their assets and get into Bitcoin. Those who took advantage of the moment weren't those who bought on the crest of the media wave. Those who entered at that time mostly lost a lot of money. When your neighbor who has never talked about cryptos in his life suddenly starts talking about Bitcoin, everything goes wrong. It is what you illustrate very well in your article.

In addition to the issue of scalability. Many of these concepts, most of those who invest in crypto following the celebrity trending, have no idea what all this means. And they are only in the cryptos by FOMO. And when they end up losing everything, they don't want to know more about the topic and start talking about a scam. When they by ignorance, end up doing this by following the media and those who seek to manipulate the market for their benefit.

$ 0.10
3 months ago

100% agree with what you commented CoquiCoin. I've seen which was the best times to buy, but my mistake was that I should have bought with more that I could afford.

To tell you about the other way too, you will not be surprised completely, but when you see it with your eyes you will be. The same influencers will tell you to sell right when the prices reach the bottom! And one more thing, they call them influencers for a good reason. They have mastered the art of manipulation.

They are not just spewing nonsense, they are paid to say what they say.

$ 0.00
3 months ago

With the recent market, it's all round green and the best to buy is when the price is all round red, but since the market is moving in a speedy form and appreciated form of which many investors are trooping in, the best is to buy now.

Last year when Bitcoin was $60k plus, many people were thinking it will reach an explosive rate of $100k but to our surprise, it started dropping drastically until we were seeing green in all the cryptocurrencies. So, this period is the period where all cryptos need to gather more momentum to rise again .

$ 0.00
3 months ago

Last year when Bitcoin was $60k plus, many people were thinking it will reach an explosive rate of $100k

You mean this year, it was just a couple of months ago at $60k

$ 0.00
3 months ago

Ya... exactly, it was early this year...I just hope same happened again

$ 0.00
3 months ago

It could happen, but I find other options more exciting as investments.

$ 0.00
3 months ago

I have been mildly cost averaging over the past 4 years! You should buy when blood is running through the streets. Not immediately but after a blood has been running a lot! Also people forget to take out some profit from time to time! So when the bulls have entered the market they just want more (virtual) profit. It is only a profit for me when it is back in the real world again!

$ 0.10
3 months ago

A very well-written article! With all the juices getting in, it might seem really enticing to put all your money in, especially with all the influencers showing up when the price is rocketing. Though we should all still remember the most important point of DYOR!

$ 0.00
3 months ago

This is a great article. I think I may have the advantage of being a contrarian. I hate trendy. And I don't follow trends blindly. I bought crypto specifically to stake it so I can have passive income over the long term. Cardeno and Ethereum are staked. I have some Algorand I traded for staked at 4%APY. I have saved nearly all of my BCH, only converting it to fiat once. I also gifted subs to my husband so he could use it for his investments.

People who follow celebrity are so often disappointed and then feel betrayed when things don't work out.

$ 0.20
3 months ago

Delving into cryptocurrency requires an alert mind. A cryptocurrency investor needs to be alert to social sentiments surrounding his chosen currencies and be particularly alert to scams which are currently prevalent in the cryptocurrency scene

$ 0.00
3 months ago

Wow that’s a great article to help me to understand buy crypto mean best invest time to get high profit thanks for sharing

$ 0.00
3 months ago

Making buy recommendations in crypto is difficult and dangerous. Personally, I think the prices are completely exaggerated. I suspect that we will soon see a deep and long crash.

$ 0.10
3 months ago

It is dangerous, this is why I didn't make any recommendation.

$ 0.00
3 months ago

That is true. Your article sounds more like a warning.

$ 0.05
3 months ago

I would consider it more like education on what to avoid doing. Maybe the markets react positevely to some kind of regulation news that has been the subject of discussion in the US. As far as I am concerned there are assets that are undervalued right now, as Bitcoin Cash. If find that price of $500 to be a good buy in, no matter if it drops or not. If BCH drops now it will regain this price later.

$ 0.00
3 months ago

Its very obvious that the media houses have always played a key role in determining the future of Cryptos either negatively or positively, no wonder most persons have had their downfalls while investing in btc but I also think that part of this same problem is largely because a lot of individuals lack the financial knowledge on what and when to invest. Great article! Keep it up!

$ 0.00
3 months ago