Even pure and hard investors of cryptography are worried at the moment. Bitcoin (BTC -7.66%)) is now down 18% compared to a summit of $ 109,000 in mid-January, and is negotiated around the level of $ 89,000 on March 3. This downward trend seemed unthinkable just a few months ago, when the election of a new Pro-Crypto president was supposed to send Bitcoin to Stratospheric New Highs.
So, is it a classic opportunity for “Buy the Dip” for Bitcoin, or the end of the Haussier Crypto market rally, like many investors and analysts are warning now? In order to answer this question, it is useful to consider three key factors.
Bitcoin historical remorse
Once you have analyzed the historic history of Bitcoin over more than a decade, one thing becomes immediately clear: a 25% drop is roughly normal for the course for Bitcoin. For example, during the period from 2016 to 2018, while Bitcoin climbed to a new summit of all time, it experienced slowdowns of 38%, 38%, 33%, 38%, 36%and 29%along the way.
You have probably heard that Bitcoin is one of the most volatile active in the world. Well, that’s what volatility looks like. From a mathematical point of view, volatility is only a statistical measure of the quantity of bitcoin which can go up or descend within a specific time. The higher the volatility, the lower the price or down. This means that Bitcoin can rush, but it can also collapse instead – often without any warnings.
In 2023, Cathie Wood of Ark Invest analyzed the historical performance of Bitcoin in the last decade, and found that he had five separate periods where the total value draw was 77% or more. If you panic now, when Bitcoin is down 25% on a record level, imagine the panic that you would feel if Bitcoin fell by 77%.
But what do you know? Bitcoin collapsed several times, but he finally rebounded to reach a new summit of all time. In 2024, Wood directed the figures and determined that, regardless of the longer -term time horizon that you look at in the past seven years, Bitcoin has always been the most efficient asset.
This is why the Mantra “Buy the Dip” has become so popular with Bitcoin investors. You essentially get Bitcoin to a 25% discount at the moment, before continuing its apparently inevitable rise.
Bitcoin’s future projections remain unchanged
This is perhaps the reason why high-level investors continue to double Bitcoin, even if its price decreases. For example, Michael Saylor has just bought $ 2 billion in Bitcoin for his business, Strategy (formerly microstrategy). He also continues to predict that Bitcoin will eventually cross the $ 10 million mark at some point in the future, before rising up $ 49 million per digital room.
Despite its disastrous start of the year, Bitcoin is always better than any other major cryptocurrency. Bitcoin can be down 14% for the year, but Ethereum is down 30% and Solana is down 25%. More speculative cryptocurrencies (such as parts even) are down 60% to 80%. Bitcoin may not be as “Haven” as it is often described, but it is always much safer than most cryptocurrencies at the moment.
Institutions continue to buy bitcoin
The good news, if you are a bitcoin investor, is that major institutional investors seem to speed up their exposure to Bitcoin. According to the latest deposits 13F with the SEC, major institutional investors (those who have more than $ 100 million in assets under management) tripled their exposure to bitcoin in the last quarter. They have now invested $ 38.7 billion in Bitcoin via new negotiated funds in exchange for Bitcoin (ETF).
Image source: Getty Images.
This seems to be a long -term trend, because more and more institutional investors warm up at the idea that Bitcoin is a class of autonomous assets with its own single risk profile. According to the investment company Bernstein, this institutional purchase is still in the early stages.
If institutions continue to buy, Bitcoin could double the price this year. At the beginning of the year, Bernstein predicted that Bitcoin would reach a price of $ 200,000 in 2025. And, at the end of February (in the middle of the current agitation on the market), he reiterated that price forecasts, suggesting that it is time to buy the decline.
Hodl for the long term
Bitcoin has always been a very volatile asset, so the current period is not new. If history is a guide, Bitcoin should bounce back again. This means that now could be another excellent opportunity to buy bitcoin.
But it will not be easy, and it will not be fun. Investing in Bitcoin is for the long -term investor placed in Hodl (keep for expensive life) through thick and thin, knowing that there could be a massive long -term gain.
