Should You Still Buy Bitcoin?
A step-by-step guide to entering and exiting your crypto positions...
Before we get started, I wanted to let you know the new episode of my podcast Room to Run is live on Spotify and Apple Podcasts.
In this week’s episode we discussed:
How long can this stock and crypto bull market last?
Review whether now if it’s too late to buy Bitcoin
Preview of next week’s market moving events
Each 10-minute episode can be listened to for FREE on Spotify and Apple Podcasts. If you enjoy the podcast, please leave a review.
Bitcoin’s been on quite a run.
The cryptocurrency has more than doubled in 2024. This came on the heels of a monster rally in 2023 when the world’s largest cryptocurrency rallied 156%.
But if you’ve been reading my newsletter the last few years, you should have already made a ton of money in Bitcoin. Back in April 2023, I sent out a newsletter titled “The Best Time to Buy Bitcoin.”
Here’s what I said:
I’ve invested in bitcoin since 2017. I wrote about my experience investing in the crypto space in my 2022 book A Beginner’s Guide to High-Risk, High-Reward Investing. Based on my background, I’d say we’re currently near the start of a new market cycle.
I even included a chart showing the stages of market bubbles, showing we had likely “Returned to the Mean” after a brutal bear market:
Since publishing this article, Bitcoin is up a massive 220%:
But that begs the question: where are we now in the crypto cycle?
The Biggest Question in Crypto
The biggest question I’m getting from people now is if they “missed the boat.”
And there are a few indicators you can watch to see if that’s the case.
My favorite of the bunch is called the Net Unrealized Profit & Loss (NUPL) indicator. This is a measure of the number of Bitcoin currently in profit. In previous cycles, NUPL peaked when 75% of recently purchased bitcoin are in profit (i.e. people are feeling very rich). Then Bitcoin bottomed when 0% of recently purchased bitcoin are in profit (i.e. people are feeling very poor).
When I published my update in April 2023, NUPL was at 31%.
Today? it’s at 62%. So according to NUPL, the cycle isn’t over yet. But we’re definitely in “late cycle” territory.
And it’s not the only indicator telling me that.
Retail is Coming
When tons of people are searching for bitcoin on Google, it’s usually a good sign we’re near a market peak. For instance, in the previous cycle Bitcoin peaked in mid-2021 and bottomed in November 2022.
This nearly perfectly coincides with the volume of Google searches for Bitcoin:
So what are Google searches showing right now? Well, I see a major spike in searches for “Bitcoin” compared to the last five years:
I am also watching for where Coinbase is in the Apple App store. Typically, Coinbase becomes the #1 downloaded free app in the App Store near the top of each cycle. This happened at the October 2021 cycle peak…
…and at the 2017 cycle peak:
At present, Coinbase is “only” the 27th most downloaded app…
…although Phantom Wallet is currently the #4 most downloaded app:
Retail investors are almost always late to crypto bull markets. They tend to pile in at the top. And right now, we’re seeing retail investors pile into crypto at rates not seen since 2021.
And while NUPL and Google Search data points to us being late cycle, sentiment is also getting stretched.
Crypto Sentiment is Heating Up
Everyone is talking about crypto now. The crypto channel of the Discord for our +1,000 member investing community is the most active it's been since January.
Sports Illustrated recently made a post about how NFL players who took salaries in Bitcoin are getting rich.
Dave Portnoy is on Twitter crying about how he should've bought Bitcoin months ago.
“Hawk Tuah” girl even posted a video thanking Michael Saylor for turning her on to Bitcoin. Speaking of which, Saylor’s company MicroStrategy (MSTR) - essentially a leveraged Bitcoin ETF - just passed $100 billion market cap.
Anecdotally, I'm getting texts from friends and family asking if its time to buy.
These are all signs that sentiment is starting to get stretched. Much like NUPL and Google Searches, market sentiment is also pointing to us being late cycle.
And it means you need to approach the current crypto market with caution.
Trust But Verify
If I had to guess, I’d say we are now in the “greed” part of the crypto bull run:
In baseball terms, I’d say we’re in the top of the 7th inning. While that may spook some of you, the catch is this is the most profitable leg of the crypto cycle. Me and our 1,000 member investing community have been long crypto from the ground floor. I’ve personally made hundreds of thousands of dollars and made millions for our members.
But those who enter here can still make some serious money. The only catch is you have to be extremely disciplined and know when to sell.
Luckily for you, this is my third full crypto cycle. And I’ve seen it all at this point. That’s why I’m doing everything I can to make sure our the 1,000+ members of our investing community capitalize on this leg of the bull market (you can join our community by clicking here).
Because the fact is this crypto bull run won’t last forever. And while we’re in the riskiest part of the cycle, it is also the most profitable.
And I plan to profit for myself and our community.
Stay safe out there,
Robert