Bitwise: Is it too late to buy Bitcoin now?

Author: Matt Hougan, Chief Investment Officer, Bitwise; Translated by: 0xjs@黄金财经

I tried to write this Chief Investment Officer Memo (CIO memi) about the biggest question facing cryptocurrency investors every week. That's why a year ago, on December 11, 2023, the title of my CIO memo was "Is it too late to buy Bitcoin now?"

At that time, Bitcoin was up 165% year-to-date, with a price of over $40,000. Here's what I wrote:

Most people I talk to these days want to know: Is it too late to buy Bitcoin now?

Most people believe that 2024 will be a great year for cryptocurrencies, including the possible launch of a Bitcoin ETF, BlackRock's entry into the field, Bitcoin halving, and more.

But as of the time of writing this article, Bitcoin is up more than 165% year-to-date, while Coinbase is up more than 300%. Have they missed the party?

I could write almost the same thing today.

Again, there is optimism about 2025, a pro-crypto government in Washington, and bitcoin ETFs, corporations, and governments buying up bitcoin in droves as supply decreases due to the 2024 halving.

Again, everyone wants to know if it’s too late to buy bitcoin now.

My answer this year is the same as it was last year: “not too late.” Most investors still don’t have exposure to bitcoin. Until that changes, you’re by definition in the early stages.

I share this recap not as a victory lap — crypto predictions can be a humbling act — but in the hope of putting this feeling into context.

Bitcoin always feels like it’s too late. It always has, and it always will.

But what about tactical exits?

What people really want to know is, will Bitcoin see a pullback that will allow them to enter the industry at a lower price level?

The answer is, yes, it is likely. Bitcoin is very volatile, and we should expect big pullbacks.

But trying to time these pullbacks is risky. Someone who thought they got in at $40,000 in December 2023 is still waiting for a pullback to $100,000. Will they ever see $40,000 again?

Focusing too narrowly on pullbacks can miss the big picture. Here’s an example: Let’s say you were a terrible market timer; you bought at the absolute peak of the last cycle, on November 10, 2021, when Bitcoin hit $68,780. Then the price of Bitcoin fell straight below $17,000. What bad luck, right? You probably feel silly. But suppose, despite your poor timing, you held on to that position until today.

You would have made over 42%, beating the S&P 500 over the same period.

Or, what if you had bought Bitcoin during the 2017 mania, when it peaked at $19,217? Bitcoin then fell all the way to over $3,000.

But if you had held on today, you would have made over 400%, more than double the S&P 500’s return of about 150%.

The temptation to try to time the market is great. But if you think an asset will go up 5x or 10x — and you’re only betting a small portion of your portfolio on it — does it really matter if your timing is perfect? ​​

As the old adage goes: it’s time in the market, not time in the market, that counts, always.

A final story: I remember the first time I heard about Bitcoin. It was the day Bitcoin first broke $1. I was leading a team of young financial analysts at a traditional financial firm, and we had a one-hour meeting to discuss this new innovation.

I didn’t get to buy that day. I was busy, and I figured it might be too late.