Last year, when Bitcoin was at $100,000, I decided to sell it. I gave up a potential gain of about $20,000, but I also hedged the volatility of last year and used my funds to capitalize on the Trump rally. Over time, it’s proven that sometimes patience and strategy are more important than simply chasing profits.
Bitcoin’s Current Scenario
Now, a year later, Bitcoin is back at $100,000. But if we consider Bitcoin’s level at $69,000 at the end of last year, i.e., 2021, and factor in inflation, it would be worth around $80,000 today. This means that this cycle isn’t showing a 10x increase from its previous high, as expected. If this is indeed the peak of this cycle, it represents a real increase of only about 20% compared to the previous cycle.
This increase is quite modest compared to many stocks, and not even significantly higher than the average for gold. This is a reminder to investors that it’s not enough to make decisions based solely on price data; it’s also important to understand the actual returns and risks.
Considerations for Investors
You might say that if you had bought at $20,000, your investment would have quadrupled. This is true, but that would have been if you had invested at a lower level. The current situation is probably not the bottom, but possibly the top. Therefore, investors need to exercise caution and decide whether the risk is worth it.
Bitcoin’s price has always fluctuated. This time, reaching $100,000 may be exciting for investors, but considering it a sure sign of future growth could be risky. Furthermore, the actual gains are relatively low compared to last year.
Bitcoin has rebounded to the $100,000 level, but investors need to understand that this doesn’t always signal gains. While this is the peak of the cycle, actual growth has been limited. Therefore, investors should carefully plan their strategies, balancing risk and potential gains.
Disclaimer: This article is for informational purposes only, and you should consult a financial advisor before making any investment decisions based on the information provided. Investing in cryptocurrencies comes with high risk and the potential for capital loss.
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