What’s the Price of Bitcoin Today? And Other Questions You Shouldn’t Ask

Authored by Makara
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Makara

Published January 24, 20229 mins
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Bitcoin is a groundbreaking technology and only 13 years young. It is also an asset that is still finding its role within financial markets and subject to quite a bit of polarized opinions. As such, it is no surprise to see immense volatility in the price. Whatever the price is today, it almost certainly won’t be that tomorrow. Heck, in an hour, Bitcoin’s price likely won’t be whatever it is right now. The value of BTC leaps, falls, crawls, does a little dance—and seldom with much, if any, warning, at least in the short term. In a market that never sleeps, this can lead to investors constantly wondering What is the price of Bitcoin now? and then endlessly checking their investment app to see if their holdings have gone up or down, refreshing, then refreshing just one more time, then refreshing again an hour later—the crypto equivalent of a late-night YouTube toy unboxing video wormhole, but honestly maybe less informative. (Even a 10-year-old’s toy reviews are less fickle!)

Worse still, asking oneself What is the price of Bitcoin? can lead to counterproductive thinking when it comes to making investments. Say you see that the price of BTC appears to be trending upwards. In a bout of optimism, you invest more… only for the price to soon slip, making you a bit of a pessimist—a feeling you act on, before it rises again. Obviously this is way oversimplified. But the point is: If you ask yourself What is the price of Bitcoin?, the answer you’re going to get is only going to offer you very limited, short-term information. And we believe that’s not the sort of stuff that is best for basing one’s investment decisions on.

All of which is why “What is the price of Bitcoin” is actually on our list of Questions to Not Ask. (Yes, we have a list.)

Don’t get us wrong: We’re fans of Bitcoin. That’s why we offer it, including as a standalone basket (and in several of our thematic baskets). But we like the questions we ask of our investments to be a bit more expansive. They could stretch the amount of time they look at: What’s the longer-term trajectory of Bitcoin, over the next year, or the next five years? Or they could expand to consider the greater crypto universe: How does Bitcoin compare and contrast with what other, younger coins are offering? How will they shape the ecosystem, and how will Bitcoin then fit into that space? If you ask bigger questions like those, you end up with more substantial answers. And you’ll be operating less on moment-to-moment feelings (or, at the very least, subjecting your moods to fewer swings!), and you’ll be taking more considered stances that you’ve developed through the course of finding your answers.

Other Questions to Not Ask

We told you we had a list! Here’s some more of it.

What’s the Most Popular Crypto Right Now?

For one, the answer is probably just Bitcoin—at least if you’re going by market cap, and even if you’re going by trading volume (and excluding the stablecoin Tether). For two, those words “right now” again reveal a short-term perspective. (It’s implicit in that first question on our list, which might as well be: What is the price of Bitcoin right now? You can’t really ask What is the price of yesterday?—that’s not how tenses work, unless you’re some sort of time lord.) But consider what happens if you adjust the question just a touch, to: What’s going to be the most popular crypto? Sure, depending on your timeframe, the top individual coin might still be BTC. But you’re no longer seeking out a mere snapshot: You’re looking at the motion of assets, considering how they relate to the success of other trends, and extrapolating to map out their possible trajectory. Not to get too deep, but by changing that question, you’re no longer seeking an answer that’ll soon be the past; you’re asking: What do I think the world is going to be like, and how do I want to fit into that world? Even if you don’t have a time machine, that’s not such a bad perspective to take.

What Are Elon Musk, Celebrities, and Other YouTube Influencers Saying?

All due respect to the financial expert Elon Musk plays on TV, but in general, there are two reasons we take people’s investment advice: 1. We trust their expertise, and/or 2. Their interests align with ours. Many brands use celebrities to promote products and services. We’re not against that. Celebrities are fun and entertaining—that’s their job. But when it comes to making an investment decision, they’re simply not experts. (How much did, say, Kim Kardashian really know about EthereumMax before dubiously promoting it, leading to it spiking before it almost exclusively fell from that point onward?) And as for the second point, well, we can’t think of many overlapping interests that even billionaire Kim K has with the guy who’s bested Jeff Bezos for the title of richest man in the world—let alone any of us non-billionaires. That said, you can—and maybe should—keep an eye on what someone like Musk’s company actually does. We’ve seen before how his wavering on having Tesla accept Bitcoin for its cars can affect the crypto market—and it could affect things once again if the automaker rejoins the crypto-as-payment trend.

What Meme Coin Should I Invest In?

There can only be so many top dogs. And while we’ll admit they seemed a little silly to start, somehow the interest and joy that people have found in Dogecoin and Shiba Inu have solidified themselves as assets that some crypto investors take seriously, especially given their mammoth market caps. This change from silly to substantial is super rare. So in general, when considering a meme coin, you should just ask: …Why? (Skeptical pause very much encouraged.) Why did the coin’s creators make the coin? As a joke? As a means to make themselves rich? Neither of those are particularly reassuring reasons to invest in an asset, because if either of those (or both) are its main utility, then there’s only so much logic you can apply to the market for the coin. And as fun as the meme may have seemed, soon you may find yourself trying to predict the unpredictable—which is not all that fun.

Some Questions to Actually Ask

We’re not saying you shouldn’t ask any questions! You definitely should—lots of them, honestly. These might be good places to start.

What Is the 3- to 5-Year Growth Trend of Crypto?

Once more, with feeling: Consider the longer-term. Three years ago, in 2019, BTC’s price was about to double, from around $4,000 to $8,000 (which was less than half of its then-all-time high, set in mid-December 2017). Ethereum had just begun building its ETH2 overhaul, which it expects to complete this year. And ’twas kitties—not punks nor apes—who ruled the NFT kingdom. It would have been difficult then to imagine what has since followed. (Who would have thought that the CEO of Binance—big as it was even then—would reportedly be worth as much as Mark Zuckerberg?) But it could be worth it to look at how crypto has grown in the intervening years—what’s risen, what’s fallen (or at least been surpassed—sorry, kitties), and, of course, what may rise in the three or five years to follow. 

What Areas of Crypto Have the Most Growth Potential?

Is it the decentralized finance apps hoping to replace the traditional finance system? The many metaverses blooming? Web 3.0, the online architecture that some believe will become the future of the Internet? If you’ve got your answer—fantastic. We’ve tried to simplify your ability to invest in any of those sectors by having individual baskets for each, consisting of a range of coins essential to that space. Or maybe you’ve read up on the ETH2 upgrade, and you believe Ether is about to have a stellar few years; we’ve got a basket for that, too. Or maybe you’ve been wondering: What are people going to want to do in the crypto universe? What are they going to value? And who is going to make that possible? And you’ve located a specific linchpin to all of what’s to come that you believe is the future and that you want to specifically back. Great! We love the idea of investing in something you not just hope will grow, but that you really believe in. That way, you’re not only hopefully literally profiting from its success, you’re also supporting its creation and development—meaning you win twice if it comes to fruition.

What Is the Best Strategy for Me to Deploy My Funds Into Crypto?

This can be a bit personal. Actually, it should be a bit personal. Because, sure, there are some universal fundamentals. (Diversification, for instance, is key.) But there are certain things that only you, or your financial planner, can answer. Like: What’s the right balance of risk for you, given what you have, what you want, and what you could stand to lose? And given your risk tolerance, and the trends you’re noticing, how should you then rebalance and reallocate your investments? As has been the case with perhaps all of the alternative questions we’ve suggested here, this isn’t the sort of question you should just ask yourself once. You should keep thinking, keep adjusting, keep, in essence, improving. Because that’s the actual goal here. When you ask What is the price of Bitcoin, all you’re looking at is how something else is performing—and, therefore, missing an opportunity to reflect on how you yourself are growing.


DISCLAIMER:

Makara Digital Corporation (“Makara”) is an investment adviser registered with the US Securities and Exchange Commission. Registration as an investment adviser does not imply a particular level of skill or training. Makara exclusively provides investment advisory services related to investing in cryptocurrencies and other digital assets.

Makara is not a broker-dealer, exchange, custodian, or wallet provider, and is not intended for frequent trading activity. Investing in digital assets is highly speculative and volatile and Makara is only suitable for investors who are willing to bear the risk of loss and experience sharp drawdowns.

Past performance is not a guarantee of future results and there is no guarantee that any of the strategies, baskets, or cryptoassets described herein will have positive performance in the future. Questions to ask or not ask referenced above are examples to illustrate Makara’s investment philosophy and should not be construed as a complete investment analysis or recommendation. Historical growth trends are viewed with the benefit of full hindsight, while growth potential is Makara’s opinion, which is subject to change and is not a projection of future performance. Each investor will have their own investment objectives and risk tolerance, which must be considered when determining the appropriate investment plan.