By Frank Corva
Bitcoin’s price is up about 120% from this time last year.
But judging by sentiment amongst crypto enthusiasts on X, we’re only in the early innings of the bitcoin bull market that many believe will last through the better part of 2025.
How can people be so confident that bitcoin’s price will continue to rise?
Because it’s done so in the wake of the previous three Bitcoin halvings.
A Bitcoin halving refers to when the block reward for Bitcoin miners is cut in half. These halvings happen every 210,000 Bitcoin blocks — about every four years — and the fourth halving is scheduled to occur on April 20, 2024, when the Bitcoin blockchain reaches block height 840,000.
The sharp decrease in the supply of bitcoin coming to market plays a role in catalyzing a bull market.
This is hardly refutable when you look at historical post-halving bitcoin price action.
Plus, almost 60% of analysts polled by Finder believe that the upcoming halving will trigger not only a bitcoin bull run but a price rally in the broader crypto ecosystem.
But is it really “up only” for bitcoin for the next year and a half?
Is It “Up Only” for Bitcoin?
While bitcoin may crack its all-time high of about $69,000 before 2024 is out, it might also experience some significant turbulence along the way.
In all bitcoin bull markets, 20-30% pullbacks are common.
But we might see an even bigger correction if we are in the midst of a “melt-up,” when asset prices rise parabolically before crashing.
If more of the $6 trillion still parked in money market mutual funds flows back into the market before the current regional banking crisis gets exacerbated, we could see a massive market correction before the year is out.
Given that this is an election year, it’s hard to imagine that the U.S. Federal Reserve, in conjunction with the U.S. government, won’t print money to prop up the market.
Even in this scenario, though, it would be very difficult to predict bitcoin’s price by year-end.
Investing with a Bitcoin Bull Market in Mind
So, what’s the best way to invest when history shows that bitcoin’s price rises in the wake of Bitcoin halvings but also while we’re in a period of great macroeconomic uncertainty?
No one knows the answer to this question for sure, because no one can predict the future.
A tried and true method of investing in any asset class is dollar-cost averaging.
When you dollar-cost average, you make recurring purchases of an asset you want with fixed amounts of money. For example, you could invest $200 in bitcoin monthly.
This is a particularly safe strategy when investing in an asset as volatile as bitcoin, because it allows you to establish a position in bitcoin at various price points.
If we are in the midst of a melt-up, you might be buying bitcoin at a premium right now, but if you’re dollar-cost averaging, you’ll also have the opportunity to buy it at a discount if and when the market experiences a downturn.
If this sounds like a strategy you’d like to employ, research which crypto exchange is best for you and keep in mind that you can set up automated recurring buys through most of them.
And don’t forget to move your bitcoin into self-custody once you’re holding a sizeable amount of it!
Be Grateful, Not Gluttonous
If you buy bitcoin in the coming months, and if history repeats and we experience another major bitcoin bull run, keep in mind that all good times eventually come to an end.
That is, just as bitcoin’s price has skyrocketed over a year and a half in the past, it’s also drawn down as much as 93% after such bull runs.
So, if you end up seeing the dollar value of your bitcoin increase significantly, be grateful that you’ve increased your wealth and consider taking some profits instead of wishing you’d made more money or going all-in on bitcoin toward what might be the cycle’s peak.
Capitalizing on bitcoin bull runs is a great way to build wealth, but doing so requires being calm and strategic, not emotional and greedy.
About the author:
Frank Corva is a writer and analyst for digital assets at Finder.com. As someone who’s lived and traveled all over the globe, he loves the idea of the world being connected by Bitcoin (BTC) — a neutral, apolitical, secure and borderless network and digital currency.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
