When is the right time to invest in digital currency?

The previous week has seen all-time price highs for both Bitcoin & Ethereum. There are often drastic, sudden price changes in digital currency, and whenever the price starts to move there’s never any shortage of “FOMO” around whether it’s the right time to buy or not.  Case in point: Zebpay recently crossed the 5,00,000 user base (that’s half a million Indians using Bitcoins, yayy!) and is adding around 2500 Indians a day and that too just by mobile. Our estimates project close to 4 Million Indians (this will be spread all major 4 exchanges) will trade Bitcoin by the coming Diwali season.

And as with any kind of investment, this can cause a lot of anxiety, uncertainty, or fear to participate at all. Particularly when everyone wants to buy (without a doubt) but is looking for the the right price to get in. We get to know the mood of the nation by the following Google Trends report for Bitcoin in India.

We have had our first peak of interest for Bitcoin and we’re sure this isn’t the top yet! While it’s a mad rush as Bitcoin moved from INR1,00,000/BTC at the onset of May to INR1,55,000/BTC (at the time of publishing). So is it wise to buy during the mad rush or when the beast is asleep? The right answer is HODL. It means “hold” your buy, a lingua franca of the Bitcoin community.

The right strategy is to deploy unit cost averaging method, effectively lessening your exposure to price shifts by investing over a longer period of time. Historically, digital currencies have been quite volatile — and will likely remain this way as the ecosystem matures. This strategy is a great way for new participants to get involved without the anxiety of committing a significant amount of capital at a fixed price. Not to mention you also get the added benefit of adjusting this amount up or down as you go.

What most us don’t really know about Bitcoin is that it has a proven usage case as a store of value. It’s instructive that most coins try to carve out some differentiation based on much smaller use cases, such as prediction markets, buying things completely anonymously or adding a decentralized name server. Bitcoin has a large lead as a store of value over every altcoin in having existed 8 years without failure. The security of Bitcoin has been proven far more than its much younger counterparts with usage by almost every metric exceeding that of altcoins. So if you have those Crores of rupees sitting idle in that fixed deposit of yours, Bitcoin is your safe haven. And guess what? It gives you better return compared to sick interest rates by the Indian banks.

Further, Bitcoin is more accessible, with more exchanges, more merchants, more software and more hardware that support it. Bitcoin is far more liquid, with much larger volumes than every altcoin. Bitcoin has the largest developer ecosystem with more software and more implementations than any altcoin. Bitcoin has the most entrepreneurs creating companies around it with a lot of intellect, dedication and creativity going toward making it more useful. If you’re a frequent traveler across national borders, Bitcoin is your best bet for portability of money. Just so you know we have Bitcoin ATMs in the world from wherein you can buy and sell bitcoins in exchange for hard cash (fiat money). Now ain’t that nice music to your ears.

Summary: When is the right time to buy a Bitcoin? Today, right now!

2 Replies to “When is the right time to invest in digital currency?”

  1. Hi, this is a nice insight in to buying , but one of the biggest issues i noticed is the price diff between various exchanges and the spread, btx and its sister sites stopped verification because of govt silence, coin secure have not verified details, leaving only unocoin ,zebpay ( min 5k) or local bitcoins to buy coins.

    Indians are missing out in a way in my opinion , would like to hear your views on exchanges and any new sources to buy ETH from India.

    Thank you for the write up,
    Kalyan

    1. there is always an option to buy BTC’s via our credit card at other exchanges from the US, China or Japan. You can check more at Coinbase, Xapo, Bitpay, etc.

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