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Bitcoin at all-time highs over $35,000 too late to invest?

Last time Bitcoin was at all-time highs was December 2017 and everyone: from your average Joe, to main media sources was talking about it.

By Matteo Pecar.

Over the last few weeks Bitcoin had a crazy run, establishing its new record, and is now moving between 35 and 37.000$. The whole thing happened quite discreetly, and except from people already into crypto, in the rest of the world few are aware that Bitcoin is back above 30.000 $.

Why is that?

In 2017 the price rise was mainly driven by retail investors; at that time, almost all institutions and big companies were looking at Bitcoin as a sort of “joke”; some in the crypto world were still hoping that institutional money would flow in to pump the price, but it did not; and without new money flowing in, the whole bubble deflated.

Today the game is different; there is not only retail investing. This bull run was mainly driven by big companies (Paypal, Square, Microstrategy, Visa, just to mention a few); several important funds like BlackRock and Greyscale; and even very high net worth private investors.

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Matteo Pecar

Is now a good moment to enter Bitcoin?

That depends on someone’s vision and strategy. The preamble is always that Bitcoin is a risky asset; even more so now, considering that it just passed its all-time highs, and over 98% of BTC wallets are in profits; but at the same time, it is getting more and more recognition from the big players, and it definitely offers huge potential.

For someone who’s very bullish on Bitcoin; and who mostly wants to preserve the capital, diversify the portfolio, and who does not care too much about the smaller price cycles; probably yes. These profiles have a long-term view and estimate that Bitcoin in 2,3,4 years will be more valuable than today; therefore, buying at 20k or at 30k makes little difference to them. Others, with a more speculative approach, may look for the best entry point to maximize their position; but as the recent bull run showed, it is not always that easy catch.

Look at history and context

In this regard, analyzing the past mega bull cycle from 2017 that ended in January 2018, the Bitcoin price chart shows that there have been at least 8 times when Bitcoin price, in a 1 to 2 weeks’ timeframe, had retracements of at least 29%. This is to keep in mind for 2 main reasons: 1) avoid panic-selling; instead try to understand where we are in the cycle; 2) a bull cycle always offers opportunities to buy a dip.

That being said, with new players involved the dynamics of the market may change (and never underestimate the potential of network effect); but it is also true that if history does not always repeat itself, it often rhymes.

New regulations are surely coming; and if on one hand, some processes such as changing cryptocurrencies back into FIAT money are going to be more cumbersome in certain countries; on the other hand, having a more framed and regulated ecosystem will likely ease the flow of money from institutional investors as the world of finance is getting ready to claim its stake into Bitcoin.

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