Is it Too Late to Buy Bitcoin Now?
I tried to frame this Chief Investment Officer (CIO) memo as addressing one of the biggest questions crypto investors face 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 the time, Bitcoin had surged 165% for the year, surpassing $40,000. Here’s what I wrote:
These days, most people I talk to want to know: is it too late to buy Bitcoin now?
Most believe 2024 will be a great year for crypto, with the potential launch of a Bitcoin ETF, BlackRock entering the space, the Bitcoin halving, and so on.
But as of the time I’m writing this, Bitcoin has already risen over 165% this year, and Coinbase is up over 300%. Have they missed the boat?
Today, I could almost write the same thing.
Once again, people are optimistic about 2025, with Washington being led by a crypto-friendly government. Due to the 2024 halving reducing supply, Bitcoin ETFs, institutions, and governments will be buying up Bitcoin.
Again, everyone wants to know: is it too late to buy Bitcoin now?
My answer this year is the same as last year: “No, it’s not too late.” Most investors still have not even touched Bitcoin. Until that changes, by definition, you are still in the early stages.
I share this retrospective not to celebrate a win — predicting cryptocurrency can be a humbling experience — but to put that feeling into perspective.
Bitcoin always gives the impression that it’s too late to buy. It’s been like this in the past, and it will be again in the future.
But what about tactical retreats?
What people really want to know is whether Bitcoin will experience a pullback, allowing them to enter the market at a lower price level.
The answer is, yes, it’s very likely. Bitcoin is volatile, and we should expect significant pullbacks.
But trying to time these pullbacks is risky. Those who thought they were entering the market in December 2023 at $40,000 are still waiting for a 100,000-dollar pullback. Will they see $40,000 again?
Focusing too narrowly on pullbacks might cause you to miss the bigger picture. For example, let’s say you’re bad at timing the market; you bought Bitcoin at the absolute peak of the last cycle — November 10, 2021 — when Bitcoin hit $68,780. Then Bitcoin price dropped straight down below $17,000. That sounds pretty unlucky, right? You might feel foolish. But let’s say, despite your poor timing, you held that position until today.
Your returns would be over 42%, outperforming the S&P 500 over the same period.
Or, what if you bought Bitcoin during the 2017 frenzy, when Bitcoin’s highest price was $19,217? Bitcoin then dropped all the way down to just over $3,000.
But if you had held until today, your returns would be over 400%, more than double the 150% return of the S&P 500.
The temptation to time the market is strong. But if you believe an asset is going to increase 5 or 10 times — and you only allocate a small portion of your portfolio to it — does it really matter if you time it perfectly?
As the old saying goes: it’s about time in the market, not timing the market — always.
Finally, a story: I remember the first time I heard about Bitcoin. It was the day Bitcoin first broke through $1. At the time, I was leading a team of young financial analysts at a traditional finance company, and we had a one-hour meeting to discuss this new innovation.
I didn’t get a chance to buy that day. I was busy, and I thought it might already be too late.
