Should You Buy Bitcoin Now While It's Still Below $30,000?

Toward the end of June 2023, Bitcoin briefly broke above $30,000, and most people thought the price would skyrocket. However, the price failed to break the strong resistance around $29,000 and stalled for weeks. Eventually, in mid-August 2023, BTC plunged from $29,000 to $26,000 and is still trading sideways around that level.

One question that's always on an investor's mind, especially during this bear market: Should I buy Bitcoin now, or could it drop a little further?

While no one is 100% sure that Bitcoin has bottomed out yet, this article explores whether you should buy Bitcoin when it’s still below $30,000 or wait for a major price rally (up/down) to get in.

Key Takeaways:

• A decision on whether to buy Bitcoin now depends upon various factors — such as your investment goals and the prevailing market conditions — which could favor an entry due to the discounted prices.

• The upcoming Bitcoin halving in 2024, intensified interest by institutional investors and increased clarity of regulation could be catalysts to drive up Bitcoin’s price.

What Is Bitcoin and Why Is It Useful?

Bitcoin is the first successful cryptocurrency to be created and still remains the face of the crypto world. Since its entrance into fintech in 2009, Bitcoin’s transformative power on traditionally rigid and opaque financial systems has been impossible to ignore. Since then, Bitcoin has opened doors to thousands of altcoins designed to redefine how money moves in the modern world.

Powered by blockchain technology, Bitcoin allows you to instantly and cheaply transfer money and value almost anywhere in the world without the need for centralized intermediaries or middlemen who make the process lengthy and expensive. 

To date, Bitcoin's founder(s) remain anonymous with a pseudonym, Satoshi Nakamoto, associated with the coin's creation. Despite this anonymity, Bitcoin has become a favorite asset class among investors who view it as a legitimate store of value.

But why is Bitcoin useful?

Bitcoin has certain properties that, compared to fiat currencies such as the U.S. dollar, make it a great alternative to physical money. One of its most attractive properties is that it can be used as a store of value, which is why it’s commonly referred to as digital gold. Despite its volatility, Bitcoin has risen in value over the years, increasing by over 38,000%.

Bitcoin’s decentralized governance ensures that no single entity controls it — unlike most currencies, whose mechanics are in governmental hands. As part of a peer-to-peer payment network, Bitcoin can be transacted directly with another party without needing a bank to confirm the transaction.

As such, Bitcoin has become a favorite choice for cross-border payments. Traditional remittance systems such as SWIFT can take days to approve transactions, but paying with Bitcoin is nearly instant and can be done at a fraction of the cost.

Of course, this raises the question: Is Bitcoin safe? Yes, because all BTC transactions are recorded in a public ledger on a blockchain that’s nearly immutable (i.e., cannot be altered or tampered with). Additionally, each transaction's approval must be verified through Bitcoin mining, which involves cracking a cryptographic algorithm and a consensus mechanism known as proof of work (PoW).

Furthermore, Bitcoin’s use case has recently been upgraded to include non-fungible tokens (NFTs). With Bitcoin NFTs, you can own a rare and valuable inscribed satoshi with a unique identity, which can be exchanged and tracked on the Bitcoin blockchain.

Why Has the Price of Bitcoin Fallen?

The crypto market is highly volatile, and Bitcoin is no exception — considering that the world’s top cryptocurrency dropped over 75% in value from $69,000 in November 2021 to below $16,500 one year later.

However, such a decrease isn’t uncommon, since the coin often goes through cyclical price highs and lows, especially when there’s a lot of FUD (fear, uncertainty and doubt) in the market.

Usually, you can’t point to one single occurrence that causes Bitcoin’s price to dip. In the recent price plunge of August 2023, a number of macroeconomic circumstances could have triggered the dip, including the following:

• An article in the Wall Street Journal that hinted at Elon Musk’s SpaceX having sold off all (or almost all) of its Bitcoin stash, according to documents related to the secretive firm.

• The continued hiking of interest rates by the U.S. Federal Reserve. This has eroded the purchasing power of investors who, in turn, shy away from volatile and risky investments such as cryptocurrencies.

• The bankruptcy filing by struggling Chinese real estate giant Evergrande Group, which could largely affect the country’s economy and hamper investments, especially in crypto.

• Increased regulation, especially by the United States and Canada, which could destabilize the market in the short term.

Such events don’t do much to boost investor confidence, especially in an already struggling crypto market. The price plunge isn’t unique to Bitcoin, also impacting other digital currencies that tend to move in tandem with BTC’s price.

How Low Can Bitcoin Prices Go?

Despite an upbeat start to 2023, Bitcoin's price has been getting frail. The drop in August marked BTC’s worst performance in the same month over the past eight years, driving persistent bearish sentiments further. Additionally, September has historically been a poor month for Bitcoin, and price prediction experts believe we could witness another dip in the coming weeks.

That said, when looking at how low Bitcoin prices can go, it's important to consider technical and fundamental factors. From a fundamental aspect, macro triggers — such as historical price trends and a higher inflation rate — could adversely impact Bitcoin’s price. On the technical front, it’s crucial to consider technical indicators that provide insights into a potential downturn, such as bearish chart formations like the head and shoulders pattern and moving averages to assess the possibility of a breakdown in price support.

Should Bitcoin's price continue to drop, the next support levels to watch are $25,000 (which has been tested slightly) and $22,000. If the price were subsequently to continue to drop, $16,000 is a critical support level for Bitcoin — which, if broken, could see its value slide to $11,000. 

However, experts are of the opinion that Bitcoin will not fall below $10,000 in the long term, given its role as a pioneering and established cryptocurrency with global recognition.

No one knows when exactly Bitcoin will bottom out and reverse the current trend, which crypto enthusiast Michaël van de Poppe has termed the “longest bear market in history” for Bitcoin.

Is Now a Good Time to Buy Bitcoin?

In investment circles, there’s a mantra that goes “buy low, sell high.” Based on this, it may seem that entering a Bitcoin long position at the moment is attractive, due to discounted prices. However, it's also crucial to look at certain catalysts that could drive up Bitcoin's price, making now an excellent time to own some Bitcoin. Let’s look at a few of them.

Bitcoin Halving

Every time a miner successfully confirms a Bitcoin transaction by solving an algorithmic puzzle to confirm a block of transactions on the Bitcoin blockchain, they’re rewarded with BTC. After the mining of 210,000 blocks of Bitcoin transactions (approximately every four years), this reward is reduced by 50%.

Initially, Bitcoin miners received 50 BTC for successfully completing a block of transactions. The first Bitcoin halving took place in November 2012, reducing the reward to 25 BTC, and the next occurred in July 2016, which lowered the reward to 12.5 coins. The most recent halving, in May 2020, brought the reward down to 6.25 BTC.

Based on this pattern, the next Bitcoin halving is expected to take place in April 2024, and the reward will be cut to 3.125 coins.

Why is Bitcoin halving so significant in the crypto world? Every time the event nears, Bitcoin’s hash rate (the mining power needed to confirm a transaction) tends to increase. While a higher hash rate tightens security against 51% attacks on the Bitcoin network, it also translates to a higher mining difficulty, making it harder for miners to mint new Bitcoins.

As such, Bitcoin halving reduces Bitcoin’s supply, which in turn drives Bitcoin’s price and value up since the coin has a finite supply of 21 million coins.

Historically, there's been a lot of frenzy in the crypto world in the months leading up to and after an anticipated Bitcoin halving event. Experts and the crypto community are cautiously optimistic about a significant price appreciation of Bitcoin as each halving event approaches.

As an investor, you can make a strategic decision to buy Bitcoin based on this historical trend, but it isn’t a guarantee of a future increase in Bitcoin’s price. You need to research whether there’s been any growth on the Bitcoin network, and if the ever-increasing mining difficulty could level off mining activity for Bitcoin.

Source: TradingView

Growing Institutional Interest in Bitcoin

Institutions such as hedge funds, tech firms and other investment firms control a large chunk of the money running the global economy. After years of shying away from cryptocurrencies, these institutions are now evolving and actively adding Bitcoin into their portfolios. According to KPMG, institutional crypto adoption for the last five years has risen by 14.2%.

Some of the motivations driving increased institutional adoption of crypto include diversification of portfolios, client demand and hedging against turbulent economic times. Tech companies are also exploring Bitcoin and DeFi for their innovative, fast and secure payment infrastructure.

In 2023, some notable big names to enter the crypto space have been BlackRock and Fidelity Crypto®, which filed for spot Bitcoin ETFs in June. In May, top fintech names such as Goldman Sachs, Deloitte and over 30 other firms launched the Canton Network, designed for institutional crypto investment assets. 

What does this increased institutional interest mean for Bitcoin? It indicates growing confidence in Bitcoin as a store of value, rather than a purely speculative asset — as was previously the case among retail investors.

Furthermore, it reveals that continued clarity of Bitcoin regulation by governments is boosting investor confidence, especially among institutions that shun ambiguity due to the risk involved. As these institutions continue growing their Bitcoin holdings, we may witness a pump in Bitcoin’s price over time.

Growing Regulation

Bitcoin regulation has remained a gray area in most countries. Consequently, the legal gaps around Bitcoin and cryptocurrencies have opened the space to fraudulent and criminal activities, such as money laundering, crypto scams and rug pulls. However, recently, especially in 2023, various governments worldwide have moved to develop clearer policies regarding the regulation of cryptocurrencies.

The U.S. Securities and Exchange Commission (SEC) has made strides in requiring crypto exchanges to comply with regulatory requirements. While such regulatory pressure may seem unfriendly to crypto firms, who fundamentally believe in the pseudonymous nature of Bitcoin, it plays a crucial role in stabilizing the market, which will benefit the niche in the long run.

With increased regulation, the speculative nature of crypto assets will diminish and gradually be replaced by the real utility of digital currencies. It will also boost investor confidence because it will increase guidance on protecting their assets. This, in turn, will expedite mass adoption, which is vital for the growth of the cryptocurrency market as a whole. 

The recent success of Grayscale® Bitcoin Trust's battle against the SEC in the spot Bitcoin ETF case is a crystal-clear example of how heightened regulation fosters enhanced investor confidence. Just after the court ruling on Aug 29, 2023, Bitcoin’s price swiftly shot from $26,000 to almost $28,000 within a day, though it’s since eased to the $27,000 level. 

Biggest Reasons to Consider Selling Bitcoin Instead

While the slump in Bitcoin prices could be attractive to some investors, others may opt to stay away from the market. Two of the biggest reasons to consider selling BTC — or at least not buying it — are high interest rates and rising inflation.

Post-COVID, most economies worldwide have experienced turbulent times. Central banks have been hiking interest rates to try to cool things off. However, these interest rate hikes and runaway inflation point toward a looming recession, dampening the possibility of an upward movement in Bitcoin’s price.

Due to fears of a possible recession and the uncertainty of when the bear market will end, staying away from the market or selling your Bitcoin may be a smart idea (although holding Bitcoin with a long-term mindset is often encouraged). Some investors are liquidating their assets by selling off Bitcoin, or opting to invest in lower-risk assets, such as bonds. 

Will Bitcoin Return to $60,000?

Possibly. However, this depends on several factors. It’s important to note that Bitcoin and the cryptocurrency market don’t exist in isolation from the global economy. Over the years, there's been a correlation between Bitcoin prices and major indices in the stock market, especially those related to tech companies (though this correlation is dwindling over time). When there's a slump in the stock market — for example, a price drop in the Nasdaq and S&P 500 — the same is generally reflected in Bitcoin’s price.

In order for Bitcoin to return to its all-time high price, there need to be catalysts such as the 2024 Bitcoin halving, clarity in regulatory policies, continued purchase of BTC by institutional investors, additional use cases for BTC (such as Bitcoin NFTs) and a general improvement in global economic conditions.

Without such boosts, Bitcoin may continue to stagnate around the $26,000–$29,000 range, which could accelerate capital flight from exchanges or lead to a further decline in Bitcoin’s price to the next lower major support level.

Top Tips on Buying Bitcoin

As the popularity of Bitcoin continues to grow, there’s been a growing number of scams and misleading narratives on how to capitalize on the world’s top cryptocurrency. Following are some crucial tips that you may find helpful when buying Bitcoin.

Use Reputable Exchanges

One of the easiest ways to buy Bitcoin is through a crypto exchange. Unfortunately, some of these exchanges have disappeared with investors' funds, due to weak systems and the general unregulated nature of the crypto space.

As such, you need to transact Bitcoin through a reputable crypto exchange such as Bybit. By opting to buy Bitcoin through Bybit, you’ll enjoy a simple and straightforward buying experience with the platform's user-friendly interface.

Bybit understands that buying Bitcoin — especially as a beginner — can be a confusing process. As such, the platform has simplified buying Bitcoin into a four-step process. First, you'll need to download the Bybit app or sign up through Bybit's official website.

Once you've registered and been verified, you'll need to link your credit or debit card, fill out a purchase order, authorize the transaction and wait for the confirmation. Bybit prioritizes security through rigorous testing and regular bug bounty programs to ensure you can buy Bitcoin safely and securely.

Bybit also offers other ways to trade and invest in Bitcoin through Spot and Derivatives trading, as well as a savings product (Bybit Savings) for you toearn passive income from your Bitcoin.

Apply Dollar-Cost Averaging (DCA)

The Bitcoin market is highly volatile, with extreme price peaks and troughs. In order to minimize risk when buying Bitcoin, you can use dollar-cost averaging (DCA), which involves purchasing small amounts of an asset at regular, scheduled intervals at a fixed dollar value, based on changes in market price.

The strategy will earn you profits in the long run because it smoothes out the investment price over time, rather than making a lump-sum purchase. DCA has been around for years and is often used by investors with low-risk tolerance, or those beginning their investment journey.

Once you decide on the amount of funds you want to commit to buying Bitcoin, you can opt to DCA manually or through automated tools like the Bybit DCA trading bot.

Buying Bitcoin through manual DCA isn’t advised for beginner investors, who may not know when it’s the best time to enter the market. You need only a minimum investment of $1 to use the Bybit DCA bot to automate your buying strategy and enjoy perks such as customizable parameters and zero fees, which increase your overall profits.

Take Care of Your Private Keys

Once you buy Bitcoin, you’ll need to store it in a crypto wallet. In crypto circles, there’s a common saying: “Not your keys, not your crypto.” Many investors have lost their funds when hackers have gained access to their accounts. 

There are two types of crypto wallets, hot or cold. Hot wallets are online, and are issued automatically once you sign up with a crypto provider, such as Bybit. These wallets are a good choice if you're looking for convenience or for fast and regular transactions, or when making small Bitcoin transactions. However, since they’re online, these wallets are susceptible to hacking since the funds are centralized and you don’t have full control over your private keys.

A good alternative is using cold wallets, which are usually offline and give you full control over your private keys. A cold wallet can be a hardware wallet, such as Ledger or Trezor, or a paper wallet. It's imperative to note that while such wallets provide strong protection against hacking, they can be more expensive and inconvenient, and can be especially challenging to use for those new to the technology.

Don’t Go Into Debt to Buy Bitcoin

While you might have heard of people who have made huge gains from Bitcoin, many others have lost money through greed, scams, inexperience and poor understanding of the market.

Before buying Bitcoin, take time to learn about the technology and the underlying value that the coin presents. Research will not only save you from making costly mistakes but it will also open your eyes to sustainable strategies to utilize your capital efficiently.

Due to the volatility of the crypto market, investors are always advised to invest only what they can afford to lose. It’s not prudent to sell assets or get into huge debts to fund your Bitcoin purchases. At times, the market may move against you, leaving you in a precarious situation.

Other Ways to Invest in Bitcoin

Apart from buying Bitcoin directly, you can choose to invest in it in other ways. These include:

• Investing in Bitcoin-related companies — You can invest in cryptocurrency exchanges or buy a stake in companies engaging in Bitcoin activities, such as mining.

• Bitcoin ETFs — Investing in Bitcoin exchange-traded funds (ETFs) is a good way to transact Bitcoin without buying it directly. These ETFs mirror the price movement of the underlying asset and pool money from investors to purchase alternative assets.

• Bitcoin funds — You can also choose to put your money into a Bitcoin fund, whose team will execute different strategies and earn you profits. For instance, U.S. investment bank Morgan Stanley offers its clients three types of Bitcoin funds.

Should You Buy Bitcoin — or Ethereum?

Ethereum is the second most popular cryptocurrency after Bitcoin in terms of market capitalization. As an investor, you may at times wonder which of the two is better. It’s important to understand that your choice will depend on your investment goals, since each cryptocurrency serves different purposes and has individual strengths and drawbacks.

As the oldest successful cryptocurrency, Bitcoin has built a reputation of stable and secure architecture that continues to stand the test of time. With this in mind, BTC remains a good choice for an investor looking for a digital currency to facilitate fast and cheaper cross-border transactions, or as a store of value.

However, Bitcoin’s price is quite high, and the blockchain has been deemed environmentally unfriendly due to its proof of work (PoW) consensus mechanism.

On the other hand, Ethereum is focused on the development of decentralized applications (DApps) and powering the DeFi space through smart contracts. Additionally, Ethereum's growing popularity has led many to speculate that it may eventually overtake Bitcoin (i.e., the Flippening). You may want to consider buying Ethereum if your goal is to own an asset that’s creating value through powering diverse projects in its thriving ecosystem.

However, Ethereum has constantly grappled with high gas fees and network congestion, which have hampered its full growth despite attempts to revamp by switching from PoW to proof of stake (PoS). To diversify your investment portfolio, you could include alternatives, such as Layer 2 projects like Polygon and Arbitrum, which are designed to boost Ethereum's scalability.

Understanding the use cases of Bitcoin and Ethereum can help you make an informed decision as an investor. Both are top blue-chip digital assets that have been around longer than most other cryptocurrencies and have stood the test of time.

Closing Thoughts

Deciding whether you should buy Bitcoin now is tied to various factors. It will require strategy, research and patience in order to make an informed decision. Buying Bitcoin from a reputable exchange and using strategies such as dollar-cost averaging can help you leverage prevailing prices to make a profit.

As institutional interest grows and regulation continues to build investor confidence in Bitcoin and other cryptos, most people are hoping that we’ll see a positive price movement at some point. The upcoming Bitcoin halving in 2024 is another reason to buy Bitcoin now, since history indicates that its price pumps in the months leading to and after the event. As always, knowledge is power, and doing your own research before deciding whether to purchase Bitcoin or any other crypto will increase your confidence and improve your decision-making capability.

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