What Is The Best Time To Invest In Crypto

Investing in crypto has become somewhat of a trend. You will see regular people who have never dealt with any financial markets or assets opening crypto exchange accounts and buying cryptocurrencies because they heard someone made fortunes by doing so. With this much popularity, there is always the question of whether it is a good time to invest in crypto, and if not, when will be the best time to do so?

The answer to this question is not simple or straightforward by any means, as cryptocurrencies are really volatile assets and prices can change unexpectedly. But there are still times when crypto tends to behave somewhat predictably and these times are considered the best for investing in them.

When Bitcoin is really low

It is generally considered that you should buy Bitcoin when prices fall drastically. Since Bitcoin is the largest cryptocurrency on the market, after each crash it tends to gain a little bit back in some time, but when it comes to the long run, historically this is when Bitcoin shows the highest profit to its investors.

This is why crypto crashes, also known as, crypto winters are the best times to buy not only Bitcoin but most of the other cryptocurrencies. But if you are buying altcoins, you should be careful as, during these times, some altcoins fail to recover and gain new highs, and your investment might show a small return or even a loss.

To back up this theory, we can take a look at how Bitcoin’s price behaved historically. The first big Bitcoin crash happened in 2018-2019 when the price went from over $10,000 all the way down to $3,000. If you would have bought Bitcoin at the start of 2019 and waited until the middle of the year, you would have seen profits of over 300%. The price once again fell from $10,000 down to $6,000 at the start of 2020, but then skyrocketed to $60,000 before crashing down to $31,000. It once again rebounded and hit $39,000. Currently, Bitcoin is on another downfall and has been like this for over a year, but lately, it started to pick up again and went over $20,000. While we can not guarantee that Bitcoin will return to its previous peak, most of the signs and history points toward this.

During crypto burns

Another good time to invest in cryptocurrencies is when said crypto has an upcoming burn. Cryptocurrency burns are when blockchain developers, or in the case of the DAO projects, the governance token owners, decide to remove a certain amount of tokens from circulation by sending these tokens to wallets that can not be accessed by anyone. Most of the time, burns are announced before they actually take place and if you see a burn announcement from a good cryptocurrency, BNB for example, you can buy this token and sell it afterward for profit. The reason why crypto prices go up before burns is simple and you might have guessed it already. During burns, tokens are removed from circulation and will never return back, meaning that the supply is becoming smaller, and as demand will most likely stay the same or even grow, the prices go up.

But when doing so, you should be careful as to not buy a dying crypto. These burns will always increase the price, be it slightly or significantly. Because of this, some projects use burns as a last-ditch effort to try and save their crypto. If prices are going down quite fast and crypto is losing value, these companies might burn certain amounts of tokens with the hopes of saving the token, but in reality, as soon as the burn happens, prices go up very slightly, before people start selling, accelerating the death of these tokens. So make sure to have a good risk to reward ratio and check if the burn is a last-ditch effort to save this crypto or if it is to maintain healthy stability on the market and avoid inflation.

A good example of this is BNB and its prior 22 burns. Binance knows the importance of keeping its crypto stable and doesn’t let too many tokens flood the market by having constant burns. Multiple times throughout the year, Binance takes a portion of profits and buys back at least 1 million BNB tokens from users and burns them in order to keep supply low. After each Burn historical statistics show that prices have always gone up, it might not be a huge rise, but there are still good profits to be made.

Early in the morning

If you are someone who likes to day trade and looks to make small but consistent profits, then buying cryptocurrencies early in the morning is the best decision. By early morning, we mean before American traders join the market. The price of cryptocurrencies tends to start slow and grow as the day goes on and more and more people join the market. With the US being one of the largest markets for cryptocurrencies when US traders join they start buying crypto and prices go up.

But for this strategy to be successful, it needs to be a good day for cryptocurrencies. Since cryptocurrencies are volatile assets, it is best to use this approach when crypto is clearly experiencing a bull run. So if you see that crypto prices are going up on a constant basis, you can buy early in the morning and sell by the end of the day.

During Economic Crisis

Another good time to buy and invest in crypto is during times of economic crisis. As a large number of people have their investments made into crypto, during times of recession and economic crisis, they tend to liquidate their assets when they need to pay their bills and other expenses. When these people start liquidating their assets prices tend to fall, and this is the best time to invest in crypto. Geopolitical conflicts also contribute in the same way, as governments, private contractors, and regular people all have investments in cryptocurrencies, they tend to liquidate their assets as well to fund specific needs at that time. This recent huge crypto crash can be attributed to the war between Russia and Ukraine as well as the economic crisis in the EU.

Once these economic and geopolitical problems are gone, or at least people adapt to them, the investments made into crypto start to grow once more, raising the price and generating good profits.

During crypto winters

If you are someone who is planning on making a long-term investment in cryptocurrencies, then investing during crypto winters is the best option you have. A crypto winter is a period of time when the whole crypto market is in recession and prices of all cryptocurrencies are down. When investing during this time, there are two ways you can approach this investment. One way is to invest in big cryptocurrencies such as Bitcoin and Ethereum, as these cryptocurrencies have been around for a very long time and have survived many downfalls, meaning that the probability that they will gain value back again is very high. During crypto winters, these cryptocurrencies are significantly down compared to their previous peaks and if these tokens return to previous price marks, you will be making very good profits.

Another way is to look for new cryptocurrencies. Crypto winters are known to be filters of the crypto market, as some cryptocurrencies that have suffered during the crypto winter fail to regain their previous highs and never again see the peaks that they saw prior. What this means is that the spots these cryptocurrencies were occupying will need to be taken by other cryptocurrencies, and this is when some new cryptocurrencies show up. If you were to make small investments into a few relatively new cryptocurrencies during the crypto winter, even if only one of these cryptocurrencies succeeds, the profits could be very lucrative. But for this to work you need to study each crypto very carefully and analyze what they are offering, what the possibilities are for them to grow, and so on. It is not a must for these tokens to be perfect or anything, but they should be good enough and even if one succeeds, it will cover the money you invested in the failed ventures.

FAQs on the best time to invest in crypto

What is the best time of day to buy cryptocurrencies?

Since cryptocurrencies are highly volatile assets, stating that one time of the day is significantly better than another will not be a correct statement, as prices can change without any logic behind it. But, if we still want to look at this from a basic point of view, then buying cryptocurrencies before the opening of North American markets is the best time. This is when the most money starts to flow into the market and prices generally go up slightly, so buying before this happens is the best time in general. But once again, since cryptocurrencies are highly volatile, this strategy of buying is not guaranteed.

When should I buy Bitcoin?

If you are looking for a long-term investment, the best time to buy Bitcoin is when its price is very low. Bitcoin has somewhat of a cycle, where it reaches a new peak, then prices fall, it reaches an even higher peak, prices fall, and so on. Because of this, buying Bitcoin when prices have reached new peaks and then fallen is the best time. But you might end up waiting for a few years before you can sell it for a good profit.