Is Now the Time to Buy Bitcoin? Exploring Opportunities Amid Price Dips

Explore the optimal timing for investing in Bitcoin amidst recent price dips. Gain insights into potential buying opportunities and market trends.

Jun 21, 2024 - 10:46
Jun 21, 2024 - 10:47
Is Now the Time to Buy Bitcoin? Exploring Opportunities Amid Price Dips
Is Now the Time to Buy Bitcoin? Exploring Opportunities Amid Price Dips

Bitcoin has gained over 50% this year, but recent months have seen a decline. Bitcoin is now trading more than 10% below its mid-March high of $73,797, dropping below $65,000 on June 18 for the first time in over a month. Bitcoin's recent price drop presents potential buying opportunities for long-term investors. Factors such as new spot Bitcoin ETFs and the halving event could drive future price increases. Despite current volatility, many analysts remain optimistic about Bitcoin's long-term potential.

Current Market Conditions

Bitcoin has experienced a notable drop in the past three months, with prices falling more than 10% from its all-time high of $73,797 in mid-March. As of June 18, Bitcoin's price dipped below $65,000, marking the first time it has reached this low in over a month.

The Opportunity in Decline

Experienced crypto investors recognize that Bitcoin's short-term price declines often create unique long-term buying opportunities. Here are two key reasons why now might be the right time to buy Bitcoin.

Investor Inflows Into Bitcoin ETFs

Significant investor inflows into new spot Bitcoin ETFs are likely to push Bitcoin's price higher. Although there was a slowdown in ETF investments in May, the trend seems to be reversing. Early June saw a 19-day streak of net inflows into these ETFs, with over $30 billion invested so far.

Interestingly, the primary buyers of these ETFs are Wall Street hedge funds, rather than retail investors or large institutional investors. This could explain why Bitcoin's price hasn't surged despite the inflows. However, retail investors are increasing their Bitcoin allocations, and more institutional investors are expected to follow. BlackRock (NYSE: BLK) notes that pension funds, endowments, and sovereign wealth funds may soon enter the crypto market, potentially driving Bitcoin's price higher.

The Impact of Halving

The Bitcoin halving event, which reduces the creation rate of new Bitcoin by half, can trigger price increases. While the immediate effect of the halving might not be dramatic, historical trends suggest that Bitcoin prices tend to rise several months after the event. Billionaire venture capitalist Chamath Palihapitiya highlighted that during the previous halving cycle, Bitcoin's price significantly increased months after the event, eventually reaching a new high of $69,000.

Future Price Predictions

Despite current volatility, many analysts and investors believe Bitcoin could reach $100,000 or more by the end of the year. Standard Chartered has pointed out that pro-Bitcoin sentiments in political campaigns could drive the price to $100,000, and in an ultra-bullish scenario, Bitcoin could hit $150,000.

However, there are also bearish predictions. In March, JPMorgan Chase projected that Bitcoin could lose 33% of its value following the halving, potentially dropping to $42,000. This forecast was based on concerns about the impact of the halving on the Bitcoin mining industry.

Also Read: Bitcoin and Crypto Stocks Ready for Big Investors: Bernstein

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