Bitcoin Hits $7K

Bit News; Bitcoin Hits $7K

Bitcoin went to $7k after going up over $1k in less than a week. The quick rise was due in-part to an upcoming fork and a Bitcoin futures trading announcement.[1]

That is the news, now onto what to do with that information. For that, we need to break out the old opinions.

Bit Opinions; “What Do We Do With $7K Bitcoins?”

The big question everyone is asking now that Bitcoin is $7k is… “what do I do with $7k Bitcoins?”

Do I buy more, or do I sell the ones we have?

No one can answer that question but you, and we aren’t in the habit of giving investing advice (this is not investing advice), but we are in the habit of offering facts and opinions (and both of those can help you make a better choice).

First, you have to simply ask yourself, “is this going to be like early September when Bitcoin hit $5k only to plummet down to $3k, or are we going to $10k by Christmas?”

That is a very scary and exciting question to ask, but that is the question.

If you think it is going down, wait in fiat and buy the dip. If you think it is going up, why are you reading an article and not buying Bitcoins?

Regardless of your answer, there are really only a few moves I can think of here.

Move into alts while everyone else moves into Bitcoins. Bitcoin went way up, alts dropped. Why? Because people moved their alts into BTC (and this caused some extra sell-off of alts to USD). This move hasn’t been the best one thus far, but there have been a few times when people have rushed back to alts and spiked their price after a run-up of Bitcoin. Alts are either on sale, or dropping. No way to know, but betting on alts is a valid move at this point. It could result in a big payday if the winds change in your favor.

Suck it up, take money out of alts, and buy BTC at whatever price it is. Sure, you missed every lower price… but if you buy now, you won’t miss future highs. Of course, if Bitcoin starts to drop now or after the fork… you could be in for a rough ride. Still, historically, this would have been the best move at nearly any point so far (aside from a few times when it was a costly move in the short term).

IMPORTANT: Some exchanges, like Coinbase, will close down Bitcoin trading around the time of the fork. That means you can’t just decide to sell-off Bitcoin right away or buy it. That limits your strategies.

NOTE: In this rally all things named Bit went up. I would despite this consider any coin that isn’t Bitcoin “an alt.” I wouldn’t for example assume Bitcoin Cash will rise with Bitcoin every time. It happened this time, but ultimately it is in the same category as alts, not Bitcoin. In fact, one thing that makes me nervous about this latest spike is that things with “Bit” in the title did well. That is sort of red flag that this rise was partly based on pure speculation.

Hold fiat or major alts and pray. If you have Ether, Litecoin, Ripple, other top alts, or Fiat, there is a good chance you’ll hover around zero% gains while Bitcoin does its thing (you likely already took the hit you are going to take this week). The chances of Bitcoin dipping after the Segwit2x fork is high. Being in Fiat or major alts (and even some lucky minor alts) at that time, if this does occur, will result in a payday (or if in fiat, a chance to buy discounted Bitcoins). To make this work, you have to sell your alts when the spike / buy Bitcoin when it drops. If you wait on either, you could miss out. This could mean having to sit at an exchange at fork time.

Hold fiat and wait for the gates of hell to open up. If everything goes wrong Bitcoin could crash and that could at some point result in relatively inexpensive Bitcoins. Does it go to $5k, $4k, $3k, $2k, $1k, $100? Really no way to know (although anything below the cost of mining a coin is very unlikely and the chances of going down to the point it was at last dip is unlikely; so most likely it is $4-$5k in a hard crash). With that said, Bitcoin is just as likely to do that as it is to go to $10k. People act like they know something you don’t… but the average person does not. People predicted $7k Bitcoins… but those same people predicted $1000 Ether and $400 Litecoins. They look correct in retrospect if you just zero in on their bullish Bitcoin projection, but I would submit that them being right is somewhat a matter of happenstance. That said, betting on Bitcoin going down has thus far been the worst bet of all (aside a few alts). So, you may be waiting a while if you play the waiting game. The end result could easily be waiting for a dip that is above what Bitcoin costs now. Still, the end result of this is you buying Bitcoin, which is likely a good move.

Diversify and hope for the best. So far diversification in crypto has been a rather “blah” move. Unless you caught a big spike in an alt (which wasn’t uncommon) it has thus far resulted in you enjoying only small gains during a Bitcoin bull run. Imagine you bought $5k Bitcoin, $400 Ether, and $100 Litecoin (you have $2k per Bitcoin gains, but lost $100 per Ether and $50 per Litecoin)… you are lucky to be broken even right now! On the other hand, if and when alts come back into favor, you get to enjoy that (even if this is paired with a loss in BTC). Diversification means less gains in the current environment, and at times it has meant losses… but at other times, in a few rare instances, it has meant insane growth. If you held all coins since Jan. 1st, 2017… you would be rich. If you held all coins since Sept. 1… you are likely still down.

TIP: If you diversify, consider weighting your portfolio toward Bitcoin. Also, don’t be afraid to take gains if an alt spikes. Random-coin is likely not the next Bitcoin. Heck, the second most popular coin by market cap Ether is struggling to even be a competitor at the moment.

So which strategy is the right one? Well, simple stupid is BUY BITCOIN at any price. A conservative version of that is dollar cost into Bitcoin over time. A very conservative strategy is sell everything, take profits, and run like hell. A slightly more risky strategy, but one that could really pay off, is bet against the current market and buy some cheap alts. With that said, betting against Bitcoin before the fork seems like a bad move… However, staying in Bitcoin after the fork and not in altcoins could result in a missed opportunity. The Bitcoin gold for resulted in quick and substantial gains in the altcoin market and a dip in the Bitcoin market. It didn’t last long, but it was real, and its hard to justify leaving that on the table.

Good luck and remember. This could all work out well, or it could all end tomorrow. If it all ends tomorrow, the person who projected $10k Bitcoins will look foolish. If we see $10k Bitcoins by Christmas, then those who bet against it will be kicking themselves. There are countless ways to win or lose here, only time will tell what the right move was. Still, gonna go out on a limb and say that move involves buying Bitcoin in some respect.

Article Citations
  1. Bitcoin surges to record above $6,400 after CME announces launch of futures for digital currency

Author: Thomas DeMichele

Thomas DeMichele has been working in the cryptocurrency information space since 2015 when was created. He has contributed to MakerDAO, Alpha Bot (the number one crypto bot on Discord),...

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