Is it too late to buy bitcoin?
As James Goldsmith once said: "when you see a bandwagon, it’s too late."
With Bitcoin's price breaking $100,000 last year, many are wondering if this is one of those wagons and if it's too late now to buy.
The FOMO here is real. And while we can’t give a definitive answer or make any promises on potential future prices, we can offer some considerations before buying bitcoin in 2025.
Increased adoption
The last few years have seen more people from all walks of life adopting Bitcoin than ever before, buying directly on their own from places like Shakepay. As a result, a much broader range of people now own bitcoin.
What’s more is that major traditional financial institutions have taken great steps to make Bitcoin more mainstream. Goldman Sachs, JPMorgan, Morgan Stanley, and Bank of Montreal are among the names offering Bitcoin exposure to their customers with products like Bitcoin futures and exchange-traded funds (ETFs), greatly expanding access to Bitcoin.
This mainstream attention and newer avenues to add bitcoin to your portfolio may come at the chagrin of Bitcoin maxis (the people who are all-in on Bitcoin and love to tell you why), but it is good for volatility – that is, if you want less volatility.
The price of bitcoin might be less likely to fly straight up overnight than it used to be, but it’s also less likely to drop straight down. If you enjoy being able to sleep at night, that’s a good thing.
Hedge against inflation
Call it inflation, call it gouging, call it corporate greed. It doesn’t matter, prices are going up and a dollar ain’t what it used to be.
Unlike fiat currencies like our dollar, which can be printed in virtually unlimited supply, Bitcoin has a set maximum of 21 million coins. The fixed supply of BTC protects it from debasement and over the long term, helps it retain value against inflation.
This has a sometimes confounding effect where the price of bitcoin appears to go up, when in fact it’s not so much that bitcoin has gone up in price, but that the dollars we use to buy it have gone down in value.
Improvements to the technology
Bitcoin has always been a smart way to transfer money across borders, as it’s cheaper and faster than going through traditional means to send money abroad. Now, this speed and cost efficiency is becoming harder to ignore for anyone sending money anywhere, even next door.
Consider Layer-2 solutions like Lightning and Ark. Ark, introduced in 2023, provides low-cost anonymous off-chain, off-channel transactions, with no need for liquidity. It also makes use of virtual UTXOs and CoinJoin rounds for enhanced privacy (that’s a lot of jargon to say that it’s safe). Lightning has been around a bit longer, since 2018, and offers much of the same except that the transactions are on-channel and less attention is given to privacy and anonymity.
The potential for bitcoin is to not only become more common as a means of sending money between people, but also for settling large transactions between institutions. The relatively low cost and high speed of moving, say, $1,000,000 worth of BTC rather than $1,000,000 in cash, won’t go unnoticed forever.
Another pro worth mentioning is that it can facilitate currency exchange in a way that may avoid or reduce foreign exchange fees. If someone sends bitcoin, it can be exchanged for a different currency when it’s received, potentially bypassing traditional fees imposed by banks or currency exchange services.
However, this is still mostly just potential, but it’s potential that makes bitcoin interesting as a store of value.
I’ll halve what she’s halving
In case you missed it, the most recent halving occurred a few weeks ago, back on April 20, 2024.
A “halving” is when block rewards that miners receive are reduced by half. It’s a mechanism that helps maintain scarcity by controlling the speed at which new BTC are mined all the way until all 21 million coins are in circulation.
The halving occurs approximately once every four years and is often tied to a price increase and some volatility as speculators get involved in the time leading up to each halving.
The fact that you just missed the most recent halving shouldn’t be a reason to stay on the sidelines. All it means is that you’re way ahead of the next one.
Bitcoin is the oldest cryptocurrency, but…
Bitcoin is the true OG of crypto. It’s the oldest, the most established, and the most widely adopted. But, it’s still young. It’s only been around for fifteen years or so and while, wow, a lot has happened in that time, there’s still more maturing to do.
The technology will continue to evolve, regulatory changes may be implemented, and, as adoption continues to grow, the price of bitcoin may become more tethered to global economics.
So, is it too late?
A better question than “Is it too late?” might be “Is now a good time to add bitcoin to my portfolio?” Check the charts, read the news, and watch for a while before diving in. Decide if you want to invest once and wait, buy small amounts often, or buy and sell every day.
The risks and rewards are different for each approach, and would be different any way you expose yourself to Bitcoin, whether in an ETF in your TFSA or buying directly through, oh let’s say, Shakepay, just for example.
It sounds like a lot to pay attention to, and it can be, but it doesn’t have to be. When you get into bitcoin, like any asset, it’s no fun if it’s stressing you out.
Invest only what you’re comfortable with and be aware that you might experience strong feelings when the price goes up or down. Consider these factors so that when you do decide to buy bitcoin, you’ll be ready.
This article should not be construed as investment advice. Investing in crypto is risky. For more information, please refer to our crypto asset statement on Bitcoin.