Bitcoin's Volatility: Why Long-Term Holding Trumps Market Timing
Bitcoin's price is known for its volatility, but according to experts, trying to time the market can be nearly impossible. In fact, Andre Dragosch, head of research at Bitwise Europe, says that buying and holding Bitcoin is often a more rewarding strategy than trading around it.
The reason behind this is that gains in Bitcoin's price are consistently concentrated in just a handful of days. For example, removing the 10 best trading days from Bitcoin's annual performance would turn a winning year into a losing one in 11 out of the last 18 years.
In some cases, such as 2011 and 2013, even after stripping away their best performing days, the overall trend was still positive. However, this is not always the case, and traders often miss out on significant gains by trying to time the market perfectly.
Dragosch's conclusion is that 'time in the market beats timing the market', buying and holding Bitcoin for the long haul can be a more effective strategy than trying to catch every upswing or downswing.