December 8, 2021

Best Time to Buy Crypto

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When is the best time to buy crypto? Is it already too late? It's easy to feel like you've missed the boat. But the truth is, there's still plenty of time.

Trying to time the crypto market can feel like jumping onto an 80 MPH train.

The price goes up, and you've missed out on all those gains. The price plummets, and you worry that this is the end.

Is there any way to figure out what crypto will do ahead of time? And when's the right time to buy?

Below, review some historical trends, crypto's overall outlook, and more to help you decide when to buy crypto.

When is the Best Time to Buy Crypto?

Let's start with a very important point:

No one knows what the future prices of crypto will be. Not a minute from now, or a day, or a year.

Plenty of people will make predictions, even educated ones. Some of them will be right. Some even understand the factors that influence the market.

But the ability to predict the price of any coin is beyond even the best of us.

However, there are still ways to improve our chances of investing successfully. Below, let's take a look at some of the ways to improve your decision-making.

Should I Time My Crypto Purchases?

If the price is high, you don't want to overpay. If it's falling, it might fall further. You can pretty quickly talk yourself into a state of decision paralysis and wind up doing nothing at all.

I'll wait till next week, you tell yourself, and see where things stand. Next week comes, and the price is double what it was. You kick yourself for not being more decisive—but now it's too late.

This is called trying to time the market, and it's nearly impossible.

One widely-supported alternative to timing the market is called dollar cost averaging.

With this strategy, you split the total amount you want to invest into smaller investments made over a longer period, rather than investing it all at once.

For example, say you wanted to invest $10,000. Instead of saving up and investing one lump sum, you could invest $500 a week for 20 weeks, or $200 a week for 50 weeks.

This way, the price you pay would average out over time, instead of paying a single price at the moment you invested.

This strategy might earn you less or more than if you'd bought it all at once, depending on luck. But the point is, you're far less impacted by the volatility of your coin.

Is dollar cost averaging the best way to invest in crypto?
While there's no "perfect" way to invest, dollar cost averaging is good for investors who still want to invest in crypto but have less risk tolerance or those who know they'll be an emotional investor. It evens out your investment over a longer period, allowing you to focus on long-term investing rather than short-term gains.

What is the best time of day to buy Bitcoin?

There may be ways of improving our chances of getting a good price for Bitcoin, or any other coin you choose to invest in.

Timing the market's larger trends is very difficult and based on too many factors for most investors to successfully consider. However, when you look at smaller lengths of time, you do start to see patterns.

Some analysts would argue that the best time of day to buy Bitcoin is in the afternoon or late at night, as prices tend to drop around those times.

There also seems to be a pattern of lower prices around the weekend, with dips on Saturday and Sunday, and peaks during the middle of the week.

Looking at the year, there don't appear to be any recognizable patterns from month to month.

And since Bitcoin has only really had meaningful value since 2017 or so, there isn't enough historical data to draw many useful conclusions from.

Consider Making Long-Term Investments

One thing that makes investing in crypto difficult is how dramatically the price changes from one day to the next.

If you buy in at a peak in price and the next day the market crashes, it may feel like you've lost all your money.

But remember, as long as you don't cash out, those losses are unrealized. You still own the same number of coins as you did before. They're just worth less.

Now there might be some situations in which you'd need to sell at a loss. A family emergency, for example.

But for many, the mistake is simply not waiting long enough for the prices to bounce back.

In April and May 2021, the price of Bitcoin was between $50k - $60k. In mid-May, it dropped to nearly half that price.

If you'd bought in April, you might have felt like you wasted your money. And if you sold any time before October, you probably would've been right. But halfway through October, the price bounced back to the mid-$60,000.

And who knows where it will be in 2022?

For this reason, it may be wisest to pursue crypto as a long-term investment, rather than a way of gambling on short-term gains.

With every new all-time high, there are people who say it can't go any higher. But time and again, they've been proven wrong. The only way to really know is hold and wait.

Crypto interest accounts, crypto IRAs and staking are great ways to invest in cryptocurrency over a longer period of time. Check out our guides on these subjects to learn more.

Is it too late to buy Bitcoin?

We're all aware (and not-so-secretly jealous) of the investors who saw the potential of Bitcoin in 2012 and got in when it was still cheap.

These investors turned a couple hundred dollars into thousands or even millions.

But with prices now bouncing around in the tens of thousands of dollars, it's easy to conclude that you missed your chance.

It actually comes down to how you perceive the future of crypto.

Is it here to stay, or just a flash in the pan? Will it disappear in five years or replace the dollar within our lifetimes?

It's not an easy question to answer.

Experts (and amateurs) have been predicting the demise of Bitcoin since it first appeared. You can find hundreds of so-called "Bitcoin obituaries" online, and so far, all of them have been wrong.

There are concerns about whether Bitcoin is too energy-intensive harmful to the environment.

This is one reason that some coins, like Ethereum, have begun to shift from a proof-of-work protocol (mining) to a proof-of-stake protocol (staking) to mint new coins.

At time of writing, both Bitcoin and Ethereum are nearing their all-time highs (so far).

While there aren't any solid predictions on the future of crypto, it seems unlikely that it will disappear any time soon, barring some major catastrophic event. The interest and consistent growth of crypto over the past decade have been strong.

Can I invest $100 in Bitcoin?

Certainly! You can buy fractional shares of most cryptocurrencies, especially the higher-value ones.

Waiting till you had enough to buy a whole Bitcoin is impractical.

There's nothing wrong with making small investments, especially if that's all you can afford.

And remember, if you're practicing a strategy like dollar cost averaging, that's exactly what you want to do.

As always, take care not to invest money you can't afford to lose. If it comes down to investing in Bitcoin versus paying your rent or eating, Bitcoin is not a priority.

Chances are you aren't going to get rich overnight, which means you need to spend your money wisely. But if you can afford it, even $10 is a worthy start.

Ready to start investing in crypto? Review our guide to the best cryptocurrency exchanges to see which platform is the right fit for you.

Bottom Line

So when is the best time to buy crypto? There is no best time. If you can afford it and you've done enough research to believe it's a good investment, start as soon as you feel ready.

If the price seems like a bargain, maybe you invest big. If it seems high, plan out your investments over an extended period.

And if things don't immediately go according to plan, remember not to panic. Since you're investing with money you can afford to lose, you can afford to hold too. In a little while, things might be looking completely different.

Write to Jeremy H at jeremy.harshman@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.

Read Next:

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