Want to get rich quick with Bitcoin? Forget it, this is a long-term investment
There has been sadness in the crypto markets for a few days now. Bitcoin is writing red numbers again and the altcoins are bleeding even harder. But have we forgotten where we came from? In what context should you see all this?
When in doubt, zoom out!
The Bitcoin price around 62,000 euros, which is 15.5% lower than the highest value ever. In the last 24 hours, Bitcoin has fallen by 1.5% and even by 3.7% in the last seven days.
But the further you zoom out, the better Bitcoin is doing. If we look at the monthly figures, we see an increase of 1.6%. Over the last six months, Bitcoin has even risen by 64%. On an annual basis, the increase is no less than 161%.
And those who invested five years ago are now seeing an incredible 625% growth. No investment can match that!
Normal charts are not good enough for Bitcoin
The chart below shows Bitcoin’s price history since its inception. Because the value has increased so much over the long term, the graph is displayed on a logarithmic scale. This means that the scaling is not linear, but exponential. Traders use this view because it provides better insight into percentage changes over long periods of time.
The chart shows that Bitcoin is in a fourth cycle. Like previous cycles, this cycle also has green (rising) and red (falling) phases. Although the highest value in this cycle was reached early, it appears that the cycle is far from over. This is based on comparisons with previous cycles.
Do you have a minute?
In the previous cycles, the highest value was only reached after the so-called halvings, indicated by vertical dotted lines on the graph. This time, however, the adoption of Bitcoin ETFs has given the price a big kick in the ass, reaching all-time highs earlier in the cycle.
Bitcoin’s price development therefore remains fascinating, especially when one zooms out further and takes a long-term view. So do you still have some time? Then it can be useful to look not only at the short-term fluctuations, but also at the larger trends that take place over several years.
