Crypto Market Sell-Off: Is It Time to Buy Bitcoin?
- March 4, 2025
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Even die-hard crypto investors are getting worried right now. Bitcoin (CRYPTO: BTC) is now down 18% from an all-time high of $109,000 in mid-January, and trades around the $89,000 level on March 3. That downtrend seemed unthinkable just a few months ago, when the election of a new pro-crypto president was supposed to send Bitcoin to stratospheric new highs.
So is this a classic "buy the dip" opportunity for Bitcoin, or the end of the crypto bull market rally, as many investors and analysts are now warning? In order to answer that question, it's helpful to consider three key factors.
Bitcoin's historical track record
Once you analyze Bitcoin's historical track record over more than a decade, one thing becomes immediately clear: A decline of 25% is pretty much par for the course for Bitcoin. For example, in the period from 2016 to 2018, as Bitcoin soared to a new all-time high, it had downturns of 38%, 38%, 33%, 38%, 36%, and 29% along the way.
You've probably heard that Bitcoin is one of the world's most volatile assets. Well, this is what volatility looks and feels like. From a mathematical perspective, volatility is just a statistical measure of how much Bitcoin can go up or down within a specific period of time. The higher the volatility, the larger the price spike up or down. That means Bitcoin can skyrocket in price, but it can also collapse instead -- often without any warning at all.
In 2023, Cathie Wood of Ark Invest analyzed the historical performance of Bitcoin over the past decade, and found that it had five distinct periods of time when the total drawdown in value was 77% or higher. If you're panicking now, when Bitcoin is down 25% from an all-time high, imagine the panic you would feel if Bitcoin fell 77%.
But you know what? Bitcoin has collapsed in price many times, but it has eventually rebounded to hit a new all-time high. In 2024, Wood ran the numbers and determined that, no matter what longer-term time horizon you look at over the past seven years, Bitcoin has always been the best-performing asset.
That's why the "buy the dip" mantra has become so popular with Bitcoin investors. You're essentially getting Bitcoin at a 25% discount right now, before it continues its seemingly inevitable upward ascent.
Bitcoin's future projections remain unchanged
That might be why high-profile investors continue to double down on Bitcoin, even as its price declines. For example, Michael Saylor just bought another $2 billion worth of Bitcoin for his company, Strategy (formerly MicroStrategy). He also continues to predict that Bitcoin will eventually break through the $10 million mark at some point in the future, before soaring as high as $49 million per digital coin.