I bought 0.4 BTC via Coinbase right when the price dipped to $900. Once the price climbs back to $1200/BTC, that'll net me $115 after fees.
When the price suddenly dives, you may want to consider buying. It's always paid off so far. It seems like a solid investment strategy, because Bitcoin is still very young. Therefore it's probable that the infrastructure will continue to grow, and it will continue to become more popular over time.
It's looking like the price is about to enter into a "slow'n'steady" phase of growth... I predict it will rise from $1100 to $1500 over the next month or so.
Consider this: If you have $10k lying around, you can set up a Coinbase account and buy 9.5654BTC right now. Then you can set up an MtGox account and sell those coins when the price climbs to $1500 (which seems pretty inevitable). Therefore your $10k will become $14,262 after fees, which you can then wire back to your bank account. $4k is a pretty nice chunk of change, so you may want to seriously consider it.
But you must be willing to keep your money in BTC if the price tanks. It requires a lot of discipline not to freak out and sell. The overall thing to remember is that BTC will almost certainly hit $1500; it's just a matter of when. So if you have a mutual fund, you may want to redeem it buy BTC instead.
Something else to consider: the price of BTC won't be able to double very many more times. That means an opportunity exists right now; an opportunity that won't exist very much longer. In a year or two, I predict you won't be able to count on BTC steadily rising in value. Whereas you can pretty much count on it between now and then. Anyone who's interested in growing their money on a long-term basis should seriously consider investing now.
EDIT: My comment was written mainly for historical purposes. A year from now I'm going to go back to this comment and see how wrong I am. This is the first time I've been confident in an investment opportunity of any kind, so it'll be interesting to see whether that confidence is misplaced.
EDIT2: Don't invest any money you aren't comfortable with losing, obviously. But it's unlikely you'll lose more than half of it. I'd say there's a 95% chance that putting up $10k now will net you $4k sometime in the future, because BTC is only going to grow in popularity and capability, not diminish. Therefore the question is how long you're comfortable with waiting.
EDIT3: Hm, I've hit a nerve. I wasn't trying to tell anyone what to do... but it probably sounded that way. Sorry. I was just doing a quick writeup of my own personal thoughts regarding Bitcoin's near future outlook. I'm nobody special, so please don't take financial advice from me.
I'm fairly optimistic about the future of Bitcoin, and I own a few myself. However, I don't think this was a responsible post to make.
> When the price suddenly dives, you may want to consider buying. It's always paid off so far. It seems like a solid investment strategy
This isn't really an "investment strategy", it's just speculation - betting on the short term future and hoping it pays off. It's a fun way to gamble your money, but it's a lot riskier than the OP suggests. A "solid investment strategy" is putting a fraction of your paycheck into an index fund each month, not trying to predict the price of Bitcoin.
If you've really done your homework and you think the price of Bitcoin will go up in the long term, by all means buy a couple. Don't worry about waiting for the price to spike down; in fact, maybe stagger your purchase over a period of time to smooth out any variation (this is called 'dollar cost averaging'). Don't try to speculate on short term fluctuation; you will probably get burned.
> Consider this: If you have $10k lying around [...] your $10k will become $14,262 after fees
Or, the price could drop to $500 and you'll lose a few thousand. Can you afford to lose a few thousand dollars, even for a few months while the price recovers? Would you be better off investing it in something less risky? Do you know that you won't need that money in 6 months to pay for emergency surgery, or to fund 3 months' runway for your new startup idea?
You should try to think of investment return as compensation for taking on risk. If there's a large return in a short time, there's probably a big risk, too. Some people can afford to take big risks, but most of us can't.
Facebook's market cap is $63,000,000,000. If the market cap of Bitcoin were just 10% of Facebook, each Bitcoin would be worth about $500. 1% and it's about $50.
Can a global financial system conceivably give the world just 10% of the value of Facebook? Because just ten percent ... and one BTC is $500.
I couldn't have possibly imagined that Bitcoin would soar so quickly. In all honesty, the infrastructure has NOT improved noticeably over the last 6 months. This runup in price was fueled by shameless speculation, or possibly the Chinese seeking to evade capital controls. I've followed the Bitcoin market closely since the time I made that post, and what you'll notice is the price moves up considerable amounts based on miniscule volume. Liquidity is dire.
I would advise very cautious optimism if not pessimism at this point. Is Bitcoin worth really 20% of Facebook right now? That's a tough question, especially considering the open regulatory question in America, which I personally don't see doing so hot.
I think Bitcoin was a fantastic, visionary buy at $10-$50 back when nobody was taking it seriously, and I enthusiastically stated as much to everyone who would listen. However, at this point I'm telling people they've missed the boat. There's still plenty of value in Bitcoin, don't get me wrong. It's just that this run up was 100% speculative, and based on people hoarding coins because the price was going up. Not the sign of a healthy foundation.
The only conclusion is that Bitcoin generates more value than Facebook for it's users ;-)
To be honest I don't think you can compare a company and a market. I don't even know how you can estimate what is a "reasonable" price for a bitcoin ; since it's a finite resource it seems normal that the price would go up when more participants enter the system but I don't know of how much.
I had the same strategy as this but I realized one important thing: I was spending all of my time looking at the damn charts.
The opportunity cost of being constantly distracted and worried about your investment might be higher than the profits you're realizing. Especially if you are a developer and command decent hourly rates.
It's also not enjoyable to wake up at 4:30 in the morning, worrying about what the current price is.
Being "young" doesn't make anything a solid investment, and there is no tangible evidence that BTC has entered "slow'n'steady" growth, or crash to $1. Point of warning people to not exit BTC if it crashes touches on why it may very well crash. People panic, and with so many speculators out there, I wouldn't be surprised if BTC lost 90% of its value in one day. Honestly, your comments might be seen as a buy now or miss the boat sales pitch, although I suspect that was not your intent.
Just use coinbase. IMO it's the only exchange that actually does fiat currency to BTC correctly - all the rest have horror stories posted all over bitcointalk and reddit.
Is there a canonical source for tracking the price of BTC? Would be nice to set up an alert for large downward swings to take advantage of lows without having to watch the ticker all day.
Looks like the bitcoin fell to almost $500 now. Don't worry I am an investor in bitcoin too, bought it around $800 myself and am pretty optimistic about it.
I think it would be better if I traded daily to earn more profits as compared to keeping it for a long time.
When the price suddenly dives, you may want to consider buying. It's always paid off so far. It seems like a solid investment strategy, because Bitcoin is still very young. Therefore it's probable that the infrastructure will continue to grow, and it will continue to become more popular over time.
It's looking like the price is about to enter into a "slow'n'steady" phase of growth... I predict it will rise from $1100 to $1500 over the next month or so.
Consider this: If you have $10k lying around, you can set up a Coinbase account and buy 9.5654BTC right now. Then you can set up an MtGox account and sell those coins when the price climbs to $1500 (which seems pretty inevitable). Therefore your $10k will become $14,262 after fees, which you can then wire back to your bank account. $4k is a pretty nice chunk of change, so you may want to seriously consider it.
But you must be willing to keep your money in BTC if the price tanks. It requires a lot of discipline not to freak out and sell. The overall thing to remember is that BTC will almost certainly hit $1500; it's just a matter of when. So if you have a mutual fund, you may want to redeem it buy BTC instead.
Something else to consider: the price of BTC won't be able to double very many more times. That means an opportunity exists right now; an opportunity that won't exist very much longer. In a year or two, I predict you won't be able to count on BTC steadily rising in value. Whereas you can pretty much count on it between now and then. Anyone who's interested in growing their money on a long-term basis should seriously consider investing now.
EDIT: My comment was written mainly for historical purposes. A year from now I'm going to go back to this comment and see how wrong I am. This is the first time I've been confident in an investment opportunity of any kind, so it'll be interesting to see whether that confidence is misplaced.
EDIT2: Don't invest any money you aren't comfortable with losing, obviously. But it's unlikely you'll lose more than half of it. I'd say there's a 95% chance that putting up $10k now will net you $4k sometime in the future, because BTC is only going to grow in popularity and capability, not diminish. Therefore the question is how long you're comfortable with waiting.
EDIT3: Hm, I've hit a nerve. I wasn't trying to tell anyone what to do... but it probably sounded that way. Sorry. I was just doing a quick writeup of my own personal thoughts regarding Bitcoin's near future outlook. I'm nobody special, so please don't take financial advice from me.