At each summit, the same question comes up again and again: is it too late to get on the train? Bitcoin hit a new all-time high on October 7, at more than $124,000. The previous record was just a month earlier, on August 14, peaking at $123,000. And since May 8, the “queen of cryptos” has not fallen below the $100,000 mark. Does this mean that it will never do it again, continuing to fly from record to record, to the delight of investors who would like to ride the wave?
Impossible to say with such a volatile asset. Let us remember, however, that following the stock market crisis triggered by Donald Trump’s announcements on customs duties, Bitcoin had fallen to $75,000, or $50,000 less than its current price. A big gap, but in hindsight it was good timing for investing: “Every cycle, it’s the same thing. People sell en masse when the price falls, when it is precisely the time to reposition themselves”sighs Nicolas Marchesse, co-founder of the crypto platform Wigl.
Positive signals but with still high risk taking
Conversely, the higher you buy at a price, the more, statistically, the chances of realizing a capital gain are reduced, if the asset does not rise even higher. However, positive signals seem favorable for the months to come: “Three major factors are currently influencing the price of Bitcoin: American pro-crypto policy, the decline of the dollar, and the overall dynamics of the financial markets”explains Jean Meyer, founder of Deblock, a current account integrating a crypto wallet.
On the political side, Republican Senator Cynthia Lummis announced this week that the United States could begin Bitcoin purchases “at any time.” A decision which could further push Bitcoin upwards, just like the dollar’s continued tumble: when the value of the greenback falls, investors tend to turn to an asset like Bitcoin deemed anti-inflationary, because its quantity is limited. Finally, historically, the performance of Bitcoin also seems to be correlated with the good health of the American stock market, which is doing wonderfully (+13.5% since January 1 for S&P 500).
However, be careful of overconfidence: “The most common mistake is getting carried away by euphoria. When the market explodes, some people want to invest unreasonable amounts. We try to warn them”warns Chloé Desenfans, co-founder of Wigl. To avoid risking too much, it remains necessary to limit your exposure, even if you are optimistic: “For cautious profiles, we recommend 1 to 2% of their portfolio invested in crypto, no more. For balanced profiles, rather between 3 and 5%. And for the most dynamic, we can go beyond, up to 10%, but on condition of being ready to accept high volatility. And to suffer less from the roller coaster, progressive investment, via the DCA technique (dollar cost averaging), or investing a small amount, but on a regular basis, remains to be preferred.
