If You Ask Me For Advice On Bitcoin Investing

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image: 30btc.com
Here is a table by Wikipedia, chronologically listing the historical performance of Bitcoin.


Bitcoin value history (comparison to US$)
DateUSD : 1 BTCNotes
Jan 2009 – Mar 2010basically noneNo exchanges or market, users were mainly cryptography fans who were sending bitcoins for hobby purposes representing low or no value. In March 2010, user "SmokeTooMuch" auctioned 10,000 BTC for $50 (cumulatively), but no buyer was found.
Apr 2010$0.003On 25 Apr 2010, the now-defunct BitcoinMarket.com exchange is the first one that starts operating.
May 2010less than $0.01On 22 May 2010, Laszlo Hanyecz made the first real-world transaction by buying two pizzas in Jacksonville, Florida for 10,000 BTC.
July 2010$0.08IncreaseIn five days, the price grew 1000%, rising from $0.008 to $0.08 for 1 bitcoin.
Feb 2011 – April 2011$1.00IncreaseBitcoin takes parity with US dollar.
8 July 2011$31.00Increasetop of first "bubble", followed by the first price drop
Dec 2011$2.00Decreaseminimum after few months
Dec 2012$13.00slowly rising for a year
11 April 2013$266Increasetop of a price rally, during which the value was growing by 5-10% daily.
May 2013$130Decreasebasically stable, again slowly rising.
June 2013$100Decreasein June slowly dropping to $70, but rising in July to $110
Nov 2013$350 — $1,242Increasefrom October $150–$200 in November, rising to $1,242 on 29 November 2013.
Dec 2013$600 — $1,000DecreasePrice crashed to $600, rebounded to $1,000, crashed again to the $500 range. Stabilized to the ~ $650–$800 range.
Jan 2014$750 — $1,000IncreasePrice spiked to $1000 briefly, then settled in the $800–$900 range for the rest of the month.
Feb 2014$550 — $750IncreasePrice fell following the shutdown of Mt. Gox before recovering to the $600–$700 range.
Mar 2014$450 — $700IncreasePrice continued to fall due to a false report regarding bitcoin ban in China and uncertainty over whether the Chinese government would seek to prohibit banks from working with digital currency exchanges.
Apr 2014$340 — $530DecreaseThe lowest price since the 2012–2013 Cypriot financial crisis had been reached at 3:25 AM on 11 April[149]
May 2014$440 — $630IncreaseThe downtrend first slow down and then reverse, increasing over 30% in the last days of May.
Mar 2015$200 — $300DecreasePrice fell through to early 2015.
Early Nov 2015$395 — $504IncreaseLarge spike in value from 225–250 at the start of October to the 2015 record high of $504.
May–June 2016$450 — $750IncreaseLarge spike in value starting from $450 and reaching a maximum of $750.
July–September 2016$600 — $630DecreasePrice stabilized in the low $600 range.
October–November 2016$600 — $780IncreaseAs the Chinese Renminbi depreciated against the US Dollar, bitcoin rose to the upper $700s.
January 2017$800 — $1,150Increase
5-12 January 2017$750 — $920DecreasePrice fell 30% in a week, reaching a multi-month low of $750.
2-3 March 2017$1,290+ IncreasePrice broke above the November 2013 high of $1,242 and then traded above $1,290.
April 2017$1,210 — $1,250Decrease
May–June 2017$2,000 — $3,200+IncreasePrice reached an all-time high of $3,000 on June 12 and is oscilating around $2,500 since then. As of August 6, 2017, the price is $3,270.
August 2017$3800 —$4600+IncreasePrice reached its maximum in the history of bitcoin, an all time high of $4,600 on August 30.

And a historical trend chart below, from Investing.com


So obviously, Bitcoin has had a very high return rate for its owners.

Right now, though, the question to consider is that "Will it keep going up forever?" Well, the answer to that is "No". Nothing goes up forever. Then, again, it doesn't need to go up forever for you to make a nice gain from it. Afterall, none of us is going to be around/alive forever. So a fine-tuned version of that question to consider will be "If I buy Bitcoin now, should I expect to make the type of returns it has historically being giving?"

Now that is a very hard to answer question. If you had asked me this two months ago, I would have said NO. But then it has risen over 100% in just the last one month. It has a way of proving critics wrong. It might again double in the next few weeks. No one can reliably say what it would do in the future.

Then what is my advice to anyone considering to invest in Bitcoin now?

My advice is very simple and straightforward. Avoid the herd mentality! The Bitcoin fever is now a global one and even people who don't know how to create an email account by themselves are now into Bitcoin. That's to say it is now what's in vogue. Its recent rise is due to the huge public interest it now has. Buying into Bitcoin now would be likened to getting in at the top and expecting it to keep going up. Yes, it can happen that it'll keep going up but that likelihood is statistically smaller than the reverse.

Only one thing is worse than missing an opportunity to make good money, and that is losing money on your way to make good money.

I am telling you what I tell myself. Nothing goes up forever. Bitcoin will come crashing soon and that would present a good opportunity to buy in. But now when it's at its peak is definitely not the right time to get in.

1 comment:

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