As this blog is being written, the price of 1 Bitcoin hovers around Rs24 lakh – close to 50% off the ATH from last year. It doesn’t take a lot of browsing on social media and the news to see the fear and panic that has gripped the market.
“So, is it really a good time to stack Bitcoin?”
It’s always the same question on people’s minds, with regards to Bitcoin. It is also very unfortunate that this is the same question that prevents a lot of people – especially newcomers – from entering the market at any given time.
Ironically, there is also pretty much only one answer to this question. An answer that will stay true – no matter what happens to the price of Bitcoin.
An answer that appears – only once we take a step back, zoom out and see the bigger picture.
The fundamental truth regarding Bitcoin is this: The source code and the design of the Bitcoin protocol remains unchanged. It is also absolutely important to understand that it is the Bitcoin protocol that gives us guarantees on its future, and not its current price.
There can be a significant difference between the price of Bitcoin and the fundamentals at any given time as the price is largely dependent on the prevailing market perception around Bitcoin. When there’s fear in the market and blood on the streets, it’s easy to lose our sense of logical reasoning.
Even if the price is around 50% below the November 2021 ATH, that doesn’t mean that the price of Bitcoin can’t go even lower. We have seen several crashes of over 80% in the price of Bitcoin in the past, and we could see more of course.
At the same time, we have Bitcoin recover from every crash like a phoenix from the ashes and rise to new ATHs.
Bitcoin is still a nascent market, and a certain degree of volatility must be expected as we move towards mass adoption.
What makes Bitcoin powerful is the 4 rules at the heart of it’s protocol
- Deflationary monetary policy
- No confiscations
- No censorship
- The fact that Rules 1 to 3 can be verified by anyone at any time
Yes, the price may have crashed – but you can see that all of these rules are still being followed.
Along with these rules, the Bitcoin protocol also gives you 10 additional guarantees:
- A fixed, maximum circulating supply of 21 million Bitcoin
- A new block is issued every 10 minutes
- Mining difficulty on the Bitcoin network is adjusted after every 2016 blocks
- Decrease in miner rewards after every 210000 blocks
- A consensus algorithm based on Proof-of-Work
- Bitcoin’s Decentralized structure
- A permanently available network
- A network that has never been hacked
- The data of the Bitcoin Blockchain is immutable
- The Bitcoin code is open source
And these guarantees have always been preserved, upto this day. This is the main reason why the Bitcoin price has always recovered and why we have then been able to reach new ATHs for the Bitcoin price every time.
Once you understand that the price of Bitcoin at a given moment has no impact on the guarantees that its protocol gives you, you will understand that the only way forward is to take the right time horizon with Bitcoin: the long-term one.
Don’t make the mistake of letting your emotions guide your choices with Bitcoin. Take the long-term view of Bitcoin, understand Bitcoin better and keep stacking Bitcoin!
In fact, the most stress-free way to do this would be to adopt a rupee cost averaging (RCA) strategy with Bitcoin – where you buy Bitcoin with a fixed amount of money on a periodic basis.
In fact, this is exactly what you can do indirectly with the GoSats platform – turning your expenses into savings in Bitcoin.
This allows you to easily bypass the lingering question of when is the perfect time to buy Bitcoin. All you have to do is accumulate Bitcoin, continue HODLing while spending time learning more about it, as you onboard the train to financial freedom.
So, the answer to the question we started with is the same as it was two years ago and the same two years into the future: the perfect time to stack Bitcoin is always NOW!