Understanding Bitcoin Cycles and Accumulation Strategy
The Context of the Viral Tweet
There's currently a tweet circulating widely in the Bitcoin community that essentially says you need to buy 0.1 Bitcoin before countries start printing money massively to buy Bitcoin against each other. This idea is based on a theory that nation-states will soon enter a monetary arms race to accumulate Bitcoin.
The main argument is that governments will create massive amounts of fiat currency like dollars or euros to buy Bitcoin before their competitors. This excessive money creation would devalue their national currencies but allow them to acquire more Bitcoin. Some countries like El Salvador have already adopted Bitcoin as legal tender, and US states as well as other nations are studying the creation of strategic Bitcoin reserves.
Why 0.1 Bitcoin is Considered Significant
The figure of 0.1 Bitcoin is not chosen randomly. There will be a maximum of 21 million Bitcoin that will ever exist. This means that only 2.1 million people in the world will ever be able to own 0.1 Bitcoin or more. When we know there are about 8 billion humans on Earth, this represents only 0.026% of the world population.
This mathematical scarcity is what drives some to think that 0.1 Bitcoin could represent a fortune in the future if Bitcoin truly becomes a global store of value massively adopted by states and institutions. In this scenario, 0.1 Bitcoin could represent enormous purchasing power.
The Reality of Current Prices
Today, Bitcoin trades around $107,000, which means 0.1 Bitcoin costs about $10,700. For many people in developed countries, this amount represents a few months of savings, the price of a used car, or less than a down payment for real estate in most major cities. It's still accessible for a middle class that saves regularly.
However, experts predict much higher prices for Bitcoin. Some analysts forecast that Bitcoin could reach $200,000 by 2025, while firms like ARK Invest project prices between $300,000 and $1.5 million by 2030. In these scenarios, 0.1 Bitcoin would be worth between $20,000 and $150,000.
The Perspective of Experienced Investors
For those who have been investing in Bitcoin for a few years, the situation is different. People who bought Bitcoin between 2020 and 2021 at prices around $20,000 to $30,000 now see their investment worth $107,000. For them, accumulating 0.1 Bitcoin might represent a few weeks of gains, not months of difficult saving.
These experienced investors also know the history of Bitcoin cycles. During the last bear market, Bitcoin fell from its all-time high of about $69,000 at the end of 2021 down to about $15,000 to $16,000 in 2022, a 77% drop. This massive correction allowed those who were patient to buy Bitcoin at much more advantageous prices.
The Question of Traditional Cycles
The big debate today is whether these traditional Bitcoin cycles are broken or will continue. On one side, there are arguments to think something has changed. Institutional Bitcoin exchange-traded funds create constant and less volatile flows. National strategic reserves are becoming reality with countries like El Salvador adopting Bitcoin. Institutional investment behavior is different from retail, with less panic selling.
On the other hand, cyclical fundamentals remain present. Human nature with its phases of euphoria and panic doesn't change. Macroeconomic corrections affect all risky assets, and Bitcoin still remains correlated to stock markets in significant stress situations. Financial history shows that when everyone says this time is different, it often ends badly.
The Waiting Strategy
A prudent approach consists of waiting for a correction before accumulating Bitcoin massively. Even if institutional adoption probably creates a higher floor than before, there will probably still be significant corrections. Instead of 80% drops, we could see 50% to 60% corrections. Instead of falling to $15,000, Bitcoin could stay above $40,000 to $50,000.
If this analysis is correct, a correction from the current level of $107,000 could bring Bitcoin back to $20,000 to $30,000. In this case, 0.1 Bitcoin would cost $2,000 to $3,000 instead of $10,700 today. This represents a much more attractive accumulation opportunity.
The Main Lesson
Patience is often rewarded in cryptocurrency markets. Those who buy at the top out of fear of missing an opportunity often find themselves in an unfavorable position. Experienced investors know it's better to wait for good market conditions rather than give in to social pressure or fear of missing the train.
Even in the most optimistic scenario where Bitcoin becomes a global store of value, there will be plenty of time to accumulate at more reasonable prices. Institutional cycles are generally slower than retail cycles, and investment opportunities don't disappear overnight.
The important thing is to understand that Bitcoin remains a volatile and cyclical asset, even with growing institutional adoption. A progressive accumulation strategy during periods of weakness probably remains wiser than an impulsive purchase during market peaks.
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