Bitcoin’s volatility can be attributed, at least partly, to a couple of key variables. Therefore, as the future of Bitcoin is unpredictable and it is hard to tell which color the Bitcoin Rainbow Charts will be, some tricks to consider when buying Bitcoin are still.
Let’s have a look at some of these factors (tricks)
- Media Hype around Bitcoin
- Political impact
- Regulations around other currencies
Now, to the main question, “when is the best time to buy Bitcoin?” using the above-listed factors, we’ll tell you the best time to buy Bitcoin.
1. Whenever there’s media Hype around Bitcoin
One thing to remember and take note of is the media; even though the effect might be rather immediate and not lasting, it’d be smart to buy Bitcoin as soon as the hype starts to build, allow the price to rise, and then sell to make a profit.
It is also wise to keep a keen eye on the news in the media regarding Bitcoin. Influencers and notable public figures often rave about cryptocurrencies. This was obvious in the earlier years of Bitcoin, where it rose by 1,850% from its value as of 2015.
The media’s continuous positive remarks about Bitcoin caused more people to dive into Bitcoin. It created a supply shortage and an outburst in demand. This, in turn, led to a huge rise in the value of Bitcoin.
Unlike most other currencies, there is a cap to the total amount of Bitcoin out in circulation, which means the value isn’t easily reduced, as proper adjustments would be made to counteract the fall in price.
2. Political Impact of Bitcoin
Before a major change in a great nation’s economy or political climate, it is advisable to buy Bitcoin, as history shows a surge in Bitcoin sales in these nations.
The key is that Bitcoin serves as a universally accepted transaction means. It also boasts relative stability, as a reduction in price is never extreme.
Because of this, when there is a threat to their national economy, many people move their money into Bitcoin. For instance, research from 2015 indicated a modest Bitcoin price boost after the Crisis in Greece.
When most greek citizens started to convert their assets into Bitcoin in hopes of saving their wealth, this led to about a $100 increase in the price of Bitcoin. Another study showed that the uncertainty of Britain’s exit from the European Union caused a huge sale of Bitcoin around Britain, where many set to store their wealth in case of an economic collapse.
Bitcoin’s value rose by £200, or 64%, in the month following the Brexit announcement due to the surge in demand that followed the news of the upcoming event.
3. Government Regulations on Bitcoin
Speaking of the best times to buy Bitcoin, we need to mention when it’s advisable to stay away from Bitcoin sales.
Even though it is quite true that Bitcoin is decentralized and cannot be directly affected by any government, the government controls laws surrounding tax and trade limits and acceptability.
Furthermore, whenever a significant country’s government makes a negative regulation, it always accompanies the fall in the price of Bitcoin. This, in turn, has a serious impact on Bitcoin traders and holders.
China, which was one of the largest cryptocurrency markets in the whole world, announced a restriction on the use of Bitcoin for transactions within the country. This led to a huge loss in the value of Bitcoin, which fell below 25% in just one day.
It is, however, not entirely a bad thing as this gives a good opportunity to buy the coin and hope for its rise.
Conclusion
As stated before, the Bitcoin market’s volatility has been reduced even further by the reliability of the Blockchain. Yet this is not the same thing as saying it is steady.
So, those interested in long-term investment have nothing to worry about, while those who are in Bitcoin trading for quick money will be at a disadvantage due to its volatility.
However, there is only a certain time of the day or week of the month when it is guaranteed that buying Bitcoin will be profitable. Therefore, if thinking of trading to make profits, we suggest using the dollar-cost averaging tactic. Here, you can control the instability of your Bitcoin to an extent.
However, from careful analysis of data gathered between various months, it has been discovered that the best time to purchase Bitcoin is towards the end of a month as values tend to rise over the first week of a new month. Possibly due to an influx of salary earners in the Bitcoin market.
Always remember, only invest what you’re prepared to lose when buying something as volatile as cryptocurrencies.
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