good time to buy BTC?

The latest "cyrpto winter" was pretty severe, Crypto overall lost about 70% from its highs of last fall. Market cap dove from $3T to $1T. The Bitcoin currency, BTC, which had peaked at $65,000 in Nov. 2021, hit a low of $19,000 July 1, 2022. 

The crypto winter was linked to the covid19 pandemic. To keep their economies afloat during the worst of the pandemic (most of 2020 and 2021) Western nations created and gave away a lot of "free money". A side effect of this stimulus activity was that a lot of that free money made its way into stocks and other equity markets - including crypto. This caused prices of tech stocks and cryptos to soar. 

Since fall 2021, stimulus has been cut at a serious pace - interest rates have been boosted and some of the created money is now being "uncreated" (the bloated FED balance sheet figure is being reduced). In response: a bear market for tech stocks and a crypto winter for cryptocurrencies.

Now, finally, there are signs that tech's bear market and crypto's long winter may be over with. Over the past month prices of many of the tech stocks and cryptos have been back on the rise.  

I think now may be a good time to invest in BTC. Today's price is up about 25% from its $19,000 low of 6 weeks ago. 

Why BTC?

In my opinion Bitcoin has in recent years focused itself to serve the store-of-value market. I see it to be a store-of-value commodity that is considerably more attractive than the traditional top store-of-value, physical gold, and one that could well continue to draw market away from gold: 

• physical gold can be confiscated or stolen. If you are the creator of your Bitcoin account private key, and you do not share that key, then is NO way anyone else can EVER transfer, spend, steal or confiscate your BTC. 

• Gold stored in vaults can, and often is, double counted. Within the Bitcoin system, BTC can NEVER be double counted.  

• Large sum transactions for physical gold are costly and take considerable time. The Bitcoin system transaction fee is less than $20 and transaction time is typically less than a couple hours - for any size transaction. 

• Large sum transactions of gold across international borders are often involved and difficult, if possible at all. Transactions of BTC on the Bitcoin network are unaffected by international borders.

• Bitcoin is the oldest and most popular crypto system. It has the largest market cap ($500B). It has the biggest infrastructure (exchanges, on-line account services, institutions that use and support it..). In its 13 year history it has never had a security breach.

• BTC supply is truly limited - no more than 21M will be minted EVER - and so it cannot be diluted. The supply of physical gold actually is not limited - it typically increases a couple percent every year.

One should recognize, just as gold is not a "practical currency" (what retail stores will take it in exchange for the goods they sell?), BTC too is not a practical currency. The positive attributes of BTC and the BTC system lie elsewhere, such as in allowing direct peer-to-peer transactions, and in excellent transferability and transportability.  

One should also recognize that volatility in BTC value is extremely high (see the below chart).  

Despite these downsides, I recommend that anyone with a long term savings portfolio invest a small portion of their savings into BTC. It will be secure (if you create the account private key and do not share it). It will be immune to devaluation. It offers a possibility of very high return-on-investment (see below).

A big component of BTC's high volatility is its rapid rise in value over time: 

Averaged over the past 8 years, the value of BTC has doubled every year. (That amounts to a 256x increase - from $93 in 2014 to $24,000 today.) Of course this rise rate is not guaranteed to continue, but there is considerable room in the store-of-value market for another 10x rise in BTC price (Today the market cap of physical gold is $10,000 B. The Market cap of all BTC is $500 B). If over the next few years BTC were to pick up 50% of of the market currently held by physical gold, BTC value would rise to $240,000.