Is It Too Late to Buy Bitcoin in 2020? That’s Right, This Question Again

20.02.2020

Is it too late to buy Bitcoin? This is perhaps the most frequently asked question every veteran member of the crypto community hears from people outside the industry. No matter if the price is on the rise or falling rapidly, people are still worried. Is it too late?

One thing is clear. If you wonder whether it is “too late” to buy Bitcoin, you treat it not as a currency, not as a technology, but as an investment. It can only be “too late” to buy Bitcoin if you want to make a profit on the purchase.

So is it too late to invest in Bitcoin? The short answer is “no.” The long answer is offered below, where we shall try to explain why Bitcoin can still be a lucrative investment.

There Are Not Enough Bitcoins for Everyone

Scarcity is one of the obvious price drivers. Unlike traditional currencies, Bitcoin has finite issuance. There will only ever be 21 million Bitcoins. Its scarcity will inevitably increase as more and more people use it.

Moreover, a 2018 study revealed that so far more than a third of Bitcoins were forever lost and beyond the possibility of recovering them and thus removed from the circulation. Thus we can surmise that scarcity will play a role not only as Bitcoin is being adopted en-masse but also as the network loses access to existing Bitcoins. To quote Satoshi Nakamoto: “Lost coins only make everyone else’s coins worth slightly more.”

“It is never too late to buy Bitcoin. It’s the ONLY asset in the world that is Unconfiscatable, Censorship Resistant Value Transfer and Store of Value due to its hard money property and less than 1% of the world is aware of this,” Tone Vays, derivatives trader and analyst, said to forklog.media.

Technology Underlying Bitcoin Is Evolving

The bitcoin blockchain is known for notoriously poor scalability. While traditional payment services can process thousands of transactions per second, the Bitcoin network can handle no more than several dozen. This was perhaps one of the more concrete gatekeeping factors for Bitcoin’s wider adoption as a means of payment and numerous initiatives were proposed within the community to mitigate it, including hard forks.

This long-standing issue was partially solved by Lightning Network, an off-chain solution on top of Bitcoin. While LN is still in early development stages and not without its own problems, it does allow users to send a near-infinite amount of payments per second.

Bitcoin Is a Protective Asset

Traditionally assets like gold were used as protective assets during periods of global financial instability. But it becomes increasingly clear that many investors have been using Bitcoin as another option for preserving value through tumultuous times and hedging their risks.

One could argue that Bitcoin and gold have much in common. Both are independent of governments, have a limited supply, and their price is formed solely by the market. There is undoubtedly some truth behind Bitcoin’s cheesy “digital gold” monicker coined by crypto journalists.

As people brace themselves for another global recession, to them Bitcoin increasingly looks like a much more reliable store of value.

“No, it’s not too late to sell fiat. Citizens are still on time to sell their colored papers and exchange them for hard money like Bitcoin. The fact that Bitcoin behaves like a safe haven asset when there is news that poses a threat or increased lack of trust toward the legacy economy, demonstrates the correlation between the value of Bitcoin and the loss of confidence in the current monetary system,” Alex Casas, social impact crypto-freak and CEO of Shelpin, said to forklog.media.

Breaking Down the Volatility Concerns

Volatility scares investors and so it should. But what’s interesting about Bitcoin is that its price grows in sharp bursts, after which a period of correction inevitably arrives.

Back in 2011, you could buy a Bitcoin for just $0.30. It’s price grew steadily over the next few years and reached $30 before dropping again to $5. This was the most rapid period of growth in Bitcoin’s history.

At the start of 2013 Bitcoin cost $15 but by December the price soared to almost $1,100. The very next month the price started falling sharply, eventually reaching $220 in 2015, after which the price started slowly climbing up once more. This could be the point of origination for “is it too late to buy Bitcoin?” questions as the price was getting steep enough to render Bitcoin no longer a casual purchase.

The most recent spike happened in late 2017 when the price quadrupled in a month and reached $20,000. After a sharp fall in 2018 Bitcoin was traded as low as $3,300 but once again shows growth dynamic today.

The main takeaways here are that examining the pattern may be more important than following the price. Like with any other asset, the rate of growth and growth potential are more important for an investor to consider than the current price.

Comparing to Bitcoin’s massive growth, the price drops during periods of correction are almost inconsequential. For instance, Bitcoin grew 2,000% in 2017, but even after it dropped during the ensuing correction the price was still 300% up, comparing to the start of the year. Throughout the entire history of Bitcoin, with every burst of price growth, those who bought it a few years prior benefited the most.

“Buying Bitcoin will be one of the hardest decisions you will ever make and within two years you will most likely be very upset that it took this long for you to make it, as you should have bought some yesterday,” says Tone Vays.

Every time the real winners in Bitcoin investment are those who did not sell their Bitcoins when it was expedient. This realization actually dawned upon the community early, spawning the famous Hodl meme.

Final Takeaways

Whether it is indeed too late to buy Bitcoin for you personally, depends heavily on which forecast you tend to believe. If your optimism is anywhere near that, showed by John McAfee or Tim Draper, it will not be too late to buy Bitcoin for a while.

Another important concern is “how to invest in Bitcoin.” Experts suggest that you make small but frequent deposits over time like you would with an actual piggy bank.

“Fiat money value is quite volatile against Bitcoin. Many people recommend selling small amounts of fiat every week/biweekly/monthly no matter the price. It is a good habit to hedge the risks imposed by this debt creation race,” says Alex Casas.

But perhaps the most on-point reply to the sacramental question was given by an anonymous Reddit user who said:

“Its 3:48 a.m. here so maybe wait a few more hours so it isn’t as late. But to be honest you can buy bitcoin at any time. The markets never close.”

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Tags: Bitcoin, bitcoin price, trends