In a recent interview with Bloomberg Television's Katie Greifeld, Saylor said:
“I will buy this top forever. Bitcoin is the exit strategy. It is the strongest asset.”
As the price of Bitcoin has risen around the $65,000 mark and near its previous record high, it could pull back a bit to cause a correction. But most analysts like Mike Novogratz, CEO of Galaxy Digital, expect the price to continue rising to new record highs in 2024. Here are three reasons why many Bitcoin investors are buying on the way up.
Each new ATH dwarfs the last
Bitcoin generated its first tokens on January 3, 2009 with the Genesis block and halves the supply of new issuances every four years. Historically, the price has risen to a new record high about a year after the respective supply halving at the height of an insatiable bull market. Each new record eclipses the last:
- Peak in December 2012 (after the 2012 halving): $1.1k
- Dec 2017 ATH (post 2016 halving): $20,000
- November 2021 peak (after the 2020 halving): $69,000
Buyers with a long time horizon of four years or more before they want to trade, sell or spend their Bitcoins can make their purchase look like a bargain at a record price in just four years if the trend continues.
Exit strategy
For many Bitcoin investors, buying to the peak – and to the peak or below – is beneficial, whether they are “buy and forget” like MicroStrategy dollar-cost averaging savers or their exposure to Bitcoin prices manage more actively.
“What we are seeing right now is that Bitcoin has just become a trillion-dollar asset class, sitting alongside the likes of Apple, Google and Microsoft. But the difference between Bitcoin and the Magnificent Seven is that Bitcoin is an asset class. “It’s not a company,” Saylor told Bloomberg.
“There is not enough room in the capital structure of these companies to hold tens of trillions or hundreds of trillions of dollars worth of capital,” Saylor continued. “So Bitcoin is competing with gold, which is 10 times higher [Bitcoin] is right now. It competes with the S&P index. It competes with real estate, an asset class worth more than a hundred trillion dollars, as a store of value.”
Many Bitcoin investors believe that each Satoshi (the smallest unit of Bitcoin) is truly valuable. If Bitcoin is the paradigm shift that the MicroStrategy boss (along with many notable figures like Peter Thiel, Jack Dorsey and Tim Draper) thinks it is, then it makes sense to buy it and “hold on for dear life” (HODL) .
Buying on the way up is also good for investors who want to exit at peak price levels before and at the start of a long-term corrective trend in order to capture profits from this cycle and accumulate more Bitcoin by using the profits to start accumulating again start at the lower end of the cryptocurrency's multi-year price range.
Buying up to the peak and below makes investors using this strategy more sensitive to exiting in a timely manner to avoid losses.
When it comes to stocks, a fairly conventional strategy is to simply embrace the trend and move in the general direction of the market.
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