The right time to buy and sell Bitcoin
Let me start by saying “I am not a financial advisor and this is NOT financial advice”. This is the story of the Fakawi – our Economics Professor Mr Adrian Saville used to tell this story all the time, so this is not even my story.
The inventor of Bitcoin, Mr Nakamoto intended Bitcoin to be a digital currency for use between peers without any central management or control. I am not sure that he intended it to be an investment, but since no one can find Mr Nakamoto to confirm this point – we will never truly know the answer. What we do know is that Bitcoin has become a popular store of value, termed digital gold. If you had bought 1 Bitcoin this time last year, it would have cost you approximately $700, today that Bitcoin would be worth $7300 – tomorrow it might be worth more, or less – nobody knows. That is the problem with Bitcoin markets, they are extremely volatile and can go up or down at any given time with huge swings.
If you could buy Bitcoins at a low point and sell it at a high point – you would make the difference in profits. So traders are always looking to buy at the low price and sell at the high price. In hindsight when I look at the Bitcoin curve for 2017 – I could have made more than the average difference if I sold at the peak and bought again at the dips, but how, oh how would you have known that you are at a peak or a dip at the time. Traders are like the Fakawi – the Fakawi are short people who live in high grassland areas with grass so high, they cannot see above the grass, so they are constantly running around the grasslands screaming “we are the Fakawi” . . . it is the same with trading, you do not know where you are in the curve, you can see in hindsight where you were only after the events. This is the reason why day-trading is really not recommended with Bitcoin; even really good traders cannot make profits consistently.
When I started buying Bitcoin, like most people I bought in at the All Time High (ATH) or peak – this is usually when you hear about Bitcoin because it is in the news and everyone is bragging about how much money they are making. Soon after buying, as typical markets do – the price plummeted by 35%. This has been the usual trend and I was screaming at my wallet as my money evaporated into thin air. After some weeks it recovered and shot past the point I bought in at and kept rising to the next ATH. If I had waited and bought two weeks later – I could have bought an extra 30% of Bitcoins with the same money, I cried to myself.
Someone else asked for my advice about buying Bitcoin and I said to them “don’t buy at the ATH, never buy at the ATH”. They listened to me and did not buy, two weeks later the price was still rising and they could have made an extra 20% of money if they had bought the first time they asked me for advice – It was the ATH at the time, but the price kept rising and rising. If they buy now, they will get 30% less Bitcoins.
There are people who sold Bitcoins at $100 because they said – it can never go higher, it’s a bubble. I read a story of someone who sold all his Bitcoins at $100 and bought a house, very pleased with himself because he had invested at $1 and had made 100% profit. He thought he was lucky he could sell at $100 and invest in real solid investments like property. I wonder what he thinks now when he looks at the Bitcoin price, because his house is probably worth the same price he bought it at, real smart investors like Roger Ver kept their coins and today are Billionaires with enough money to buy their own country (Read about it here: https://www.freesociety.com) – Yes they are buying their own country.
I have concluded – there is never a good time to buy Bitcoin and it is never too late to buy Bitcoins. Just buy and HODL.
Let me finish by saying, Bitcoin and Cryptocurrency markets are very volatile, you could make millions but you could also lose a significant portion of your money, don’t invest your children’s university funds or your pension fund, invest pocket money you can afford to lose so you don’t cry when Bitcoin falls by 50% in one day, because that has happened and does happen a lot.