Bitcoin Volatility... When is right to invest?

[jwalk_s]

Hello Bitcoin Community. I will admit I am not new to the Bitcoin world, but I have not have as much of a solid understanding as many of you likely do. I am here today to express my concerns with the cryptocurrency as a whole and the investment in thereof.

Due to the constant price fluctuation of Bitcoin, and other currencies such as Ethereum and Bitcoin's new counterpart, Bitcoin Cash, I find that investing is very appealing (and scary at the same time). Bitcoin's non-centralized trading platform is very unique and intriguing to most, but the problem to myself is it's price/investment volatility. If Bitcoin can increase hundreds of dollars in value in just one day, how can companies and small businesses accept such currency? Hypothetically, if i was the owner of a coffee shop that started accepting Bitcoin or the like, I pose the risk of losing a large chunk of profit merely due to the fluctuation of price day-to-day. If i collect the equivalent of $2 in Bitcoin for every coffee that I sell, and the Bitcoin price drops significantly, I could lose all profit and go negative. That being said, I struggle to see how Bitcoin has been able to gain so much traction in the private sector given it's price-point volatility...

Back about a month ago when Bitcoin surged well above $2000 (USD) per coin then fell to just below $2000 shortly after, I thought that I would wait out the drop to about $1000/coin to invest. Surprisingly, Bitcoin surged once more in the past days to beyond $4k leaving me frustrated and confused on the recent gains.

Nobody knows the surefire answer, but do you guys think now is a good time to invest? From what I've seen, the Bitcoin exchange price drops have been insubstantial in comparison to the repetitive increases in price.

[zsmith]

If you watch the chart, bitcoin tends to dip a little and then rise a lot.  The long term trend line is upward, so buy on the dip.  You are thinking in terms of drops when you should be thinking in terms of dips.

As for the hypothetical coffee merchant, I would say that most people in this situation use coinbase or other service where the funds are instantly converted to dollars.

[Dudeperfect]

Trust me when I say this but there is no such right time to invest and hence it is recommended to buy in a smaller amount at a specific interval of time. Even after 5 years from now, there will be volatility in the price and it is not going anywhere. If you are purchasing 1 Bitcoin today then you won't be able to take the benefit if there is a dip in price tomorrow. However, instead of purchasing on a single day, you can buy 0.01 BTC for next 100 days or 0.02 BTC for next 50 days to make sure that you are taking benefits of the cost averaging method. I know this is time-consuming but in that case, you will always have something to do (i.e - purchase Bitcoins) rather than cursing yourself for making the bulk purchase.

[dayatrader]

Trust me when I say this but there is no such right time to invest and hence it is recommended to buy in a smaller amount at a specific interval of time. Even after 5 years from now, there will be volatility in the price and it is not going anywhere. If you are purchasing 1 Bitcoin today then you won't be able to take the benefit if there is a dip in price tomorrow. However, instead of purchasing on a single day, you can buy 0.01 BTC for next 100 days or 0.02 BTC for next 50 days to make sure that you are taking benefits of the cost averaging method. I know this is time-consuming but in that case, you will always have something to do (i.e - purchase Bitcoins) rather than cursing yourself for making the bulk purchase.

This is the best answer you can get. Me also trades several times and always buying for long term thinking, we need to be smart and save bitcoins for the future. I am aware that Bitcoin will be 10k soon enough that's why in a long term view you can buy any moment now.

[crisdean]

Trust me when I say this but there is no such right time to invest and hence it is recommended to buy in a smaller amount at a specific interval of time. Even after 5 years from now, there will be volatility in the price and it is not going anywhere. If you are purchasing 1 Bitcoin today then you won't be able to take the benefit if there is a dip in price tomorrow. However, instead of purchasing on a single day, you can buy 0.01 BTC for next 100 days or 0.02 BTC for next 50 days to make sure that you are taking benefits of the cost averaging method. I know this is time-consuming but in that case, you will always have something to do (i.e - purchase Bitcoins) rather than cursing yourself for making the bulk purchase.

Agreed. I tend to buy in dips and then hang on to the coins for some time and see what happens. Nice strategy too. Spread it and check the news etc. to forecast when you can see either a bull or bearish movement.

[Iranus]

If Bitcoin can increase hundreds of dollars in value in just one day, how can companies and small businesses accept such currency?

Simple.  A third party payment gateway converts it to fiat currency and automatically deposits it to the company's bank account.  Actually it's very convenient for merchants to do it and it also has lower fees to the merchant than most other payment systems.

The payment gateway BitPay (which handles Steam and many other merchants) allows a merchant to accept the fiat value of the BTC they receive with only a 1% fee.  By comparison, PayPal charges 2.9% + $0.25 to the merchant when the transaction involves goods and services.

Alternatively, the merchant can just receive BTC and hold it to hedge against fiat inflation.  Overstock say that they keep 50% of the BTC they receive.

Nobody knows the surefire answer, but do you guys think now is a good time to invest?

A good time to invest was mid 2015.  Hindsight is 20/20.

You could use cost averaging to buy when you accumulate fiat if you want to.

[Dudeperfect]

Trust me when I say this but there is no such right time to invest and hence it is recommended to buy in a smaller amount at a specific interval of time. Even after 5 years from now, there will be volatility in the price and it is not going anywhere. If you are purchasing 1 Bitcoin today then you won't be able to take the benefit if there is a dip in price tomorrow. However, instead of purchasing on a single day, you can buy 0.01 BTC for next 100 days or 0.02 BTC for next 50 days to make sure that you are taking benefits of the cost averaging method. I know this is time-consuming but in that case, you will always have something to do (i.e - purchase Bitcoins) rather than cursing yourself for making the bulk purchase.

Agreed. I tend to buy in dips and then hang on to the coins for some time and see what happens. Nice strategy too. Spread it and check the news etc. to forecast when you can see either a bull or bearish movement.

Well, I don't usually go with short term or day trade because I think that it's not my cup of tea. I invest for the long term considering the potential and scope of the particular coin in the future. The strategy I posted, works very well when it comes to the long-term investment. One can use the price of every day as his purchase price of his portfolio which takes the benefit of cost averaging technic that prevents disadvantages of sudden fall of the price.