What if Bitcoin drops another 30% to $14,000 or 50% to $10,000? It is possible.
What if Ethereum drops another 30% to $800 or 50% to $570? That could also happen.
So what’s your plan?
Are you holding out for these lower levels? They very well may come, but what’s the hidden risk in waiting for significantly lower prices?
Missing the boat entirely or paying higher prices, of course.
From their respective all time highs, Bitcoin has currently dropped about 70%, and Ethereum 76%. Historically, this is close to bottom territory and these are undeniably good discounts for long-term HODLERs. But for those of you sitting on spare cash, there’s an attractive play potentially lurking in the distance. In your head, it sounds something like this.
Buy now, HODL, and maybe there is a chance to 5x the investment over the next 10 years. But if I hold out and buy those lower levels, there’s a chance to 10x the investment or more.
Let’s assume the market drops to those lower levels, you still have the spare cash, and you have mustered the confidence to buy the blood. You pick up some Bitcoin at $10,000 and Ethereum at $500. You are basically acquiring at half of the current price. BIG multiples await you.
But don’t big multiples already await us? If you believe that $100,000 and $10,000 price targets are obtainable (or much higher), is it worth missing the move completely just to buy a bit cheaper? For some confident traders, that answer is a resounding YES. For the average investor, a 5x or 10x from here is likely enough.
If Bitcoin goes to 100K, it will not make a huge difference if you bought one at 10K or 20K. Buying one Bitcoin now will make you 80K. Buying one at 10K will make you 90K. Not such a huge difference. The difference, of course, comes if you buy 2 BTC at 10K instead. Then you have 180K profit with the same 20K investment.
Either way, there is plenty of money to be made long term by simply making sure you are in the market.
This is not your cue to ape in and it is also not your cue to become an expert at timing bottoms. This is simply your reminder of what the upside and downside look like. The upside is clearly more substantial. Everybody has their own strategy, whether it is using percentages, multiples or price levels. Regardless of your view, recognize that we have already gone deep. If the FED, inflation, and Jerome Powell give the signal, the bottom could be in before you jump on board.