Bitcoin is approaching new highs - Only 41 days have been higher
2020 has been a great year for Bitcoin so far. Since the start of the year, Bitcoin has increased in value by 90%. That means if you invested $10,000 into Bitcoin on January 1st of this year, you would already have $19,000.
Your first thought after hearing the meteoric rise of Bitcoin again this year might be that you couldn’t have known that the price would go up this year. Of course, that is true.
Knowing when to buy an asset is always a difficult judgment call. Countless “what ifs” swirl through our minds every time we make a decision that could lead to a loss of capital. However, the story of Bitcoin gets more interesting if we zoom out over the last 10 years.
Over the last 10 years, Bitcoin has experienced explosive growth. Without a marketing department or a centralized team, Bitcoin has become the most successful piece of technology in modern history. Yet, investors have continued to play the game of “what if” and repeat excuses for why investing in Bitcoin is a bad idea.
The question becomes: When was a good time to buy Bitcoin?
In an attempt to determine what days would have been good days to buy Bitcoin, we’ve evaluated the price highs of Bitcoin on a daily basis. Over the course of the last 2,568 days, we’ve meticulously evaluated the daily highs to see how many days it would have been profitable to buy Bitcoin if you sold today (October 29, 2020).
Just for fun, we also ran this same analysis on other popular assets to see how they performed. We’ve included the results for those below.
Results
Since Bitcoin and other assets are approaching all-time highs, it is easier to conceptualize this data by highlighting the number of days that Bitcoin had a higher price than today.
Starting with Bitcoin, we can see that out of the last 2,568 days, Bitcoin had a higher price on exactly 41 days. That means if you invested in Bitcoin on one of those 41 days and sold Bitcoin today, you would have lost money.
What that also means is that buying Bitcoin on any of the 2,527 other days would have been profitable! Essentially, if an investor sold their Bitcoin today that was bought on a random day in the last 2,568 days, they have a 98.4% chance of turning a profit.
Revisiting our core question: When was a good time to buy Bitcoin?
The answer becomes obvious. In the past, there have been few bad times to buy Bitcoin. The only exceptions were those 41 days where Bitcoin had a higher price.
Now, don’t forget that we may soon see new all-time highs. At that point, we can say that there was never a bad time to buy Bitcoin. Imagine if you had known that at any point in the last 10 years. Surely, you would have scooped up as much Bitcoin as you could get your hands on - even when the price was uncomfortably high.
What about other cryptocurrencies?
Evaluating some of the other top cryptocurrencies, we can see the percentage ranges from 7.14% for Waves up to 21.76% for Cosmos. While most of these assets aren’t seeing single-digit percentages for the number of unprofitable days, many assets have been closing the gap to 0% over the course of the last year.
What now?
Knowing what to do with this information isn’t clear. While this could indicate that cryptocurrencies have been rejuvenated and are on the cusp of a world-changing bull run, it could also mean we are just at the top of another market cycle.
Nobody knows.
At the end of the day, nobody knows if the price of an asset will go up or down.
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