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Author: Matt Hougan, Chief Investment Officer of Bitwise; Compiled by: 0xjs@Bitlink Vision
I’m trying to write this Chief Investment Officer Memorandum (CIO memi) about the biggest problem facing cryptocurrency investors every week.That’s why a year ago, December 11, 2023, my CIO memo was titled “Is it too late to buy Bitcoin now?”
At that time, Bitcoin rose 165% this year and the price was over $40,000.Here is what I wrote:
Most of the people I talk to these days want to know: Is it too late to buy Bitcoin now?
Most people believe 2024 will be a great year for cryptocurrencies, including the possible launch of Bitcoin ETFs, BlackRock’s entry into the field, Bitcoin halving, and more.
But as of this time of writing, Bitcoin has risen more than 165% this year, while Coinbase has risen more than 300%.Have they missed the feast?
Today I can almost write the same thing.
again,There is optimism about 2025, and Washington will be ruled by a crypto-backed government, and Bitcoin ETFs, businesses and governments will buy Bitcoin crazes as the supply drops in 2024 halving leads to a slump.
Again, everyone wants to know if it’s too late to buy Bitcoin now.
My answer this year is the same as last year: “It’s not too late.” Most investors still have no exposure to Bitcoin.Before this change, you are by definition in an early stage.
I share this review not to celebrate victory—the cryptocurrency prediction can be a humbling act—but to the hope of putting that feeling in the context.
Bitcoin always gives people the feeling that it is too late to buy.This is the case in the past and the future.
But how about tactical retreat?
What people really want to know is whether Bitcoin will have a callback that will allow them to enter the industry at a lower price level?
The answer is, yes, very likely.Bitcoin is volatile and we should expect a sharp pullback.
But trying to seize the timing of these callbacks is risky.Those who think they entered the market for $40,000 in December 2023 are still waiting for a $100,000 callback.Will they see $40,000 again?
Focusing too narrowly on the callback may miss the bigger picture.For example: Suppose you are a bad market timing player; you bought at the absolute peak of the previous cycle, November 10, 2021, when Bitcoin reached $68,780.Subsequently, the price of Bitcoin fell directly below $17,000.How bad luck is this, right?You may feel stupid.But assume that although you have a bad grasp of the timing, you have held this position until today.
Your earnings will exceed 42%, exceeding the S&P 500 index for the same period.
Or, what if you bought Bitcoin during the 2017 fanatic period, when the highest price of Bitcoin was $19,217?Bitcoin then fell all the way to over $3,000.
But if you keep holding it today, your earnings will be more than 400%, more than double the S&P 500’s return of about 150%.
There is a great temptation to try to seize the market opportunity.But if you think an asset will rise 5 or 10 times – and you bet on it only a small part of your portfolio – then is it really important to take the timing perfectly?
As the old proverb says: It is always the time in the market, not the timing in the market.
Finally, let’s tell a story: I remember the first time I heard about Bitcoin.That was the day when Bitcoin first broke $1.At the time I was leading a team of young financial analysts at a traditional finance company and we had an hour-long meeting to discuss this new innovation.
I didn’t have time to buy that day.I’m very busy and I think it might be too late.
