The Bear is dead, long live the Bull!
It has seemed to me that we were at or close to the bottom of the market for some time. In November I was able to add to my Bitcoin portfolio with additional loans from Ledn, at a price around $17-18k per Bitcoin.
Around the New Year, appropriately enough, it looked more certain that we had turned a corner. I increased my holding of Bitcoin, via dollar loans against Bitcoin (at around $22k), while being cautious and open to the possibility of further significant falls in the market.
However, it is obvious now that the worst is behind us and we should – mostly – be seeing increases in value from here on in. I say mostly because, of course, Bitcoin never goes up in a straight line, and we can expect spikes and troughs as its value on average goes up.
As I write this Bitcoin is at $29160 and Ether at $1969 on Coinbase. It looks like a great time to buy in as the market shakes off its ‘crypto winter’ and starts to build momentum towards a new all-time high.
It is important to be patient, however. Bitcoin’s value rises and falls in 4 year cycles because of its halving, and the rest of the market follows along in its wake. Therefore we can expect good gains leading up to the forthcoming halving, but the real breakout is likely to take place in the 6 months afterward.
The next halving is due in April 2024. In advance of it we can hope for a steady increase in the value of Bitcoin, plus a faster spike in its value in the 6 months from the halving to October 2024. That should produce the next Bitcoin All Time High (when I’ll be looking to sell) – and then, realistically, the usual fall again afterwards towards 2026 until the next halving approaches in 2028.
In terms of Bitcoin as an investment then, I see the current moment as a great time to buy in. That could be via a lump sum purchase (especially while Bitcoin is below $30k and Ether is below $2k) but Dollar Cost Averaging over the next 12 months would also be a very good strategy.
A suggested diversified portfolio would be something like 50% Bitcoin, 25% Ethereum and 25% of either a range of alternative coins or blue chip NFTs such as the Mutant Ape Yacht Club (which currently has a floor of just 11.9 Eth).