Should I buy some Bitcoin now? But what if I end up buying at the top? 😰
In the asset market, there is a term "Market Timing." Market timing is a strategy to find the optimal investment timing in the market, and it's important in Bitcoin investment as well.
Firstly, the essence of market timing is to predict the market's direction and buy at the low point and sell at the high point. In simple terms, it's a strategy to buy cheap and sell expensive.
However, as attractive as this sounds, it's really difficult to accurately predict the market. This is true not only for the stock market but also for the cryptocurrency market.
According to research from Boston College and Morningstar, "Investors who attempted market timing often showed lower performance than those who held investments for the long term."
Especially with crypto assets, because of its high volatility, it's even more difficult to catch the exact bottom and top of the market.
So, what's the conclusion? If you're thinking about investing in cryptocurrencies like Bitcoin, it's more important to have a long-term perspective and be clear about your reasons for buying before investing.
Rather than asking if it's okay to buy Bitcoin now, it would be more appropriate to approach it from a perspective of asset allocation, considering your investment goals and risk tolerance.
If you have a positive outlook on the long-term future of Bitcoin, using a dollar-cost averaging strategy, where you invest a fixed amount regularly, can also be a good approach.
Ultimately, the "Market Timing" strategy of buying low and selling high may look appealing, but the success of an investment is often more dependent on adhering to your own investment principles and reasons for buying, as well as your risk management strategy, than on the accuracy of your entry timing. This applies to any asset, including Bitcoin.
So, is it okay to buy Bitcoin now? Well, you should first ask yourself, "Why do you want to buy it? How much and for how long do you plan to invest?"