For many investors, this may seem like the worst time to invest in Bitcoin (Cryptography: BTC). After all, Bitcoin is currently down nearly 25% from its all-time high of $109,000 in January. Additionally, tariff uncertainty and market volatility continue to weigh heavily in the crypto market in the near future.
But everything is not lost. In fact, if history is a guide, now may be the best time to add to your Bitcoin location.
This is why.
It’s not too modest to say that global financial markets have been turned upside down as President Donald Trump announced his release date on April 2nd. Even President Trump has admitted that investors have gotten a bit of “Yippy.”
The iconic American tech stocks have lost trillions of dollars in market value. The US dollar is currently trading at its lowest level in three years. The threat of the global trade war involving China is desperately revising forecasts for all S&P 500 stocks.
Image source: Getty Images.
Amidst all this market turmoil, Bitcoin could become a safe haven asset and valued store. That’s the scenario that Bitcoin enthusiasts have been talking about for over 10 years. As they see it, Bitcoin begins to see a record influx if countries around the world decide to follow their “Sel America” promises.
Where does the money go without flowing into US government debt or dollar-controlled assets (such as US stocks)? The obvious and simple answer is gold. Things become interesting because Bitcoin is often referred to as “digital gold” due to its inherent rarity and escape properties. So, while most of the money may flow into physical gold, another may flow into “digital gold.”
That’s why I’m paying attention to the influx of investors into Bitcoin ETFs. These numbers are reported regularly and are one of the best ways to determine whether the “bitcoin as a valuable repository” debate resonates with investors. If the first quarter’s record Bitcoin ETF outflow suddenly becomes a record Bitcoin inflow, you can see that investors are beginning to look at Bitcoin the same way they see gold.
Bitcoin has largely ruled out its January high, but it still trades at a price of $83,500, with only a 10% drop per year. Please note: Bitcoin was trading for just $70,000 on Election Day. Therefore, over the past six months, Bitcoin has grown by nearly 20%. It’s not the massive “Trump Rally” that everyone was hoping for, but it’s still a great bump.
The story continues
But I got it – Bitcoin’s recent performance over the past few months is disappointing and sometimes heartbreaking. Bitcoin started the year with so many promises and fanfare, but now it appears that it could be a collateral loss in the World Trade War.
In the case of comfort, a 25% drop in Bitcoin prices is nothing new. Bitcoin is famous for its volatility. It can do large spikes along the way, and large spikes along the way. Over the course of 15 years, we have actually experienced five different periods when more than 75% of its value is lost.
But what do you know? Every time it was better than before and bouncing back. After a 65% increase in Bitcoin in 2022, it responded with triple digit returns in 2023 and 2024. In fact, in either year it was the world’s most performant asset and not nearby.
Of course, historical performances do not guarantee future performance. However, it suggests that Bitcoin is much more resilient than most people would expect. As far as you take a long-term perspective, Bitcoin can be one of the best investments you’ve ever made.
Throughout April, CNBC’s market analysts have commented on how retail investors wanted to “buy DIP.” Maybe we are all simply being denied. But it seems almost impossible that “magnificent seven” stocks have been crushed as they have, and that Bitcoin was once at risk of falling below $70,000.
However, if there is one asset built for a volatile world, it is Bitcoin. It was created in response to the 2008 global financial crisis. As a result, I intend to do what Bitcoin investors have been doing for over a decade.
Yes, I’ll “buy Bitcoin Dip.”
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Dominic Basulto has a position in Bitcoin. Motley Fool has a position and recommends Bitcoin. Motley Fools have a disclosure policy.
Bitcoin is down 25%, eliminating all profits from Trump rally. Should investors be worried? Originally published by The Motley Fool
