Should You Buy Bitcoin While It’s Below $65,000?

In the five years leading up to the all-time high, Bitcoin (BTC 4.96%) increased by 1,760% in value. But since that peak was reached in March 2024, the price has fallen about 13%.

A quick 13% move could be a big deal for many stocks, but it seems somewhat slow in the choppy cryptocurrency market. Bitcoin has essentially traded sideways for the past six months as investors eagerly await a breakout move.

Does the current setup mean you should buy Bitcoin while it’s trading below $65,000?

Recent developments

To say that 2024 has so far been an eventful year for Bitcoin would be putting it mildly. Things started shortly after the calendar turned to January, when the Securities and Exchange Commission approved spot Bitcoin exchange-traded funds (ETFs) to trade in a highly anticipated move. Industry watchers saw this as the event that legitimized Bitcoin, both on Wall Street and in Washington.

ETFs offer individual and institutional investors a convenient and regulatory-compliant method of gaining exposure to the price of Bitcoin. To date, over $17 billion has gone into the various ETF products on the market.

Then on April 19, Bitcoin suffered a halvewhich halved the amount of Bitcoin miners receive as a reward for securing the network and processing transactions. This event occurs approximately once every four years and puts the spotlight on Bitcoin’s predetermined inflation rate.

In the 12 to 18 months after a halving, Bitcoin has historically experienced a major run. Based on past performance, we are in the early stages of what could be another sizeable upward trajectory.

Since this is a presidential election year, Bitcoin has also received political attention. Investors are encouraged by the possibility that either presidential candidate will adopt favorable policies that will further support the progress of Bitcoin and the cryptocurrency industry. In July, Donald Trump said he wanted the US to be the “crypto capital of the planet.”

Another possible catalyst for Bitcoin in the short term is any action taken by the Federal Reserve, namely, eventually start cutting interest rates after growing aggressively two years ago. From an investment perspective, lower rates in the economy encourage more risk-taking for higher returns. Since Bitcoin is viewed as a risk asset, it could find more capital in its direction.

Focus on the bigger picture

Bitcoin’s most recent and short-term catalysts are getting a lot of attention. But they can also distract from what really matters. Investors should focus on the bigger picture.

A key fact that should not be forgotten is that Bitcoin has a fixed supply cap. New coins are created on a set schedule, with 21 million being the final cap to be reached at some point in the future. 94% of the lifetime supply is already on the market. This shortage is certainly valuable to many people.

I don’t think this feature can be overstated. Bitcoin is a direct threat to the current financial system, which is based on a rapidly growing money supply and rising levels of debt. The fact that there is an asset that is separate from all this financial instability is compelling to investors. It is believed that as the US dollar and other fiat currencies continue to be degraded, Bitcoin should rise in value.

At the time of writing, Bitcoin is trading 18% below its peak price, which was hit earlier this year in March. The fact that the crypto is still below $65,000 could attract investors who are optimistic about its long-term prospects. If that sounds like you, then you should consider buying the dip and keeping it for the next decade. Of course, make sure this position is part of a well-diversified portfolio.