For many investors, this might seem like the worst possible time to invest in Bitcoin (BTC -0.80%). After all, Bitcoin is now down nearly 25% from an all-time high of $109,000 in January. And tariff uncertainty and market volatility will continue to weigh heavily on the crypto market for the foreseeable future.

But all is not lost. In fact, if history is any guide, now might be the best possible time to add to your Bitcoin position.

Here’s why.

Bitcoin as a store of value

It’s not an understatement to say that, since President Donald Trump announced Liberation Day on April 2, the global financial markets have turned upside down. Even President Trump admits that investors are getting a little “yippy.”

Iconic American tech stocks have lost trillions of dollars in market value. The U.S. dollar is now trading at its lowest level in three years. The threat of a global trade war involving China has analysts frantically revising their forecasts for every single stock in the S&P 500.

Image source: Getty Images.

Amid all this market chaos, Bitcoin could become a safe haven asset and a store of value. That is the scenario that Bitcoin enthusiasts have been talking about for more than a decade now. As they see it, Bitcoin will begin to see record inflows if nations around the world decide to follow through on their “Sell America” promises.

If money is no longer flowing into U.S. government debt or dollar-denominated assets (such as U.S. stocks), where is all that money going to go? The obvious, no-brainer answer is gold. And that’s where things get interesting, because Bitcoin is often described as “digital gold,” due to its inherent scarcity and disinflationary properties. So, while the lion’s share of the money might flow into physical gold, another portion could flow into “digital gold.”

That’s why I’m keeping a close eye on investor inflows into the spot Bitcoin ETFs. These numbers are reported on a regular basis, and it’s one of the best ways to tell if the “Bitcoin as a store of value” argument is resonating with investors. If record-high Bitcoin ETF outflows in Q1 suddenly become record Bitcoin ETF inflows in Q2, then you’ll know that investors are beginning to view Bitcoin the same way they view gold.

Bitcoin’s historical track record

Even though Bitcoin is significantly off its January highs, it still trades at a price of $83,500 and is only down 10% for the year. Keep in mind: Bitcoin was trading for just $70,000 on Election Day. So, over the past six months, Bitcoin is up nearly 20%. That’s not quite the massive “Trump Rally” everyone expected, but it’s still a nice bump.

But I get it — Bitcoin’s recent performance over the past few months has been disappointing, and at times, heartbreaking. Bitcoin started the year with so much promise and so much fanfare, and now it looks like it might become collateral damage in a global trade war.

If it’s any solace, a 25% downturn in the price of Bitcoin is nothing new. Bitcoin is famous for its volatility. It’s capable of massive spikes on the way up, as well as massive spikes on the way down. Over its 15-year history, it has actually experienced five distinct periods when it has lost 75% or more of its value.

But you know what? Each time, it has bounced back, better than before. After Bitcoin collapsed in value by 65% in 2022, it responded with triple-digit returns in 2023 and 2024. In fact, in both years, it was the best-performing asset in the world, and it wasn’t even close.

Should you buy Bitcoin?

Historical performance, of course, is no guarantee of future performance. But it does suggest that Bitcoin is far more resilient than many people assume. As long as you take a long-term perspective, Bitcoin could be one of the best investments you ever make.

Throughout April, market analysts on CNBC have been commenting on how willing retail investors have been to “buy the dip.” Maybe we’re all simply in denial. But it seems almost impossible that the “Magnificent Seven” stocks have been crushed the way they have, and that Bitcoin was at one time perilously close to dropping below $70,000.

However, if there’s one asset that was purpose-built for a volatile world, it’s Bitcoin. It was created in response to the global financial crisis of 2008. As a result, I’m going to do what Bitcoin investors have been doing for more than a decade.

Yes, I’m going to “buy the Bitcoin dip.”

The total value of cryptocurrencies locked (TVL) in decentralized finance (DeFi) protocols has lost all its gains since Donald Trump was elected the US President in November 2024.

Since the US election, DeFi TVL rose to as high as $138 billion on Dec. 17 but has retracted to $92.6 billion by March 10, as noted by analyst Miles Deutscher.

Solana has borne the brunt of criticism as its memecoin popularity faded, but Ethereum has faced its own challenges in recent cycles, failing to reach a new all-time high while Bitcoin soared past $109,000 on Jan. 20, the day Trump took office. Ethereum’s TVL has dropped by $45 billion from cycle highs, DefiLlama data shows.

Ether’s (ETH) record high price of $4,787 from November 2021 remains unbroken despite positive industry developments, such as spot exchange-traded funds (ETFs) launching in the US and Trump’s executive order for a strategic Bitcoin reserve.

Related: Bitcoin risks weekly close below $82K on US BTC reserve disappointment

Ethereum’s $1.8 billion weekly net exchange outflow

Nearly 800,000 Ether, worth approximately $1.8 billion, left exchanges in the week starting March 3, resulting in the highest seven-day net outflow recorded since December 2022, according to IntoTheBlock data.

The outflows are unusual given Ethereum’s 10% price decline during the period, hitting a low of $2,007, per CoinGecko. Typically, exchange inflows signal selling pressure, while outflows suggest long-term holding or movement into decentralized finance (DeFi) applications, such as staking or yield farming.

“Despite ongoing pessimism around Ether prices, this trend suggests many holders see current levels as a strategic buying opportunity,” IntoTheBlock stated in a March 10 X post.

Before March 3, Ethereum experienced net exchange inflows daily, indicating that investors were selling during the downturn, said Juan Pellicer, senior research analyst at IntoTheBlock, in comments to Cointelegraph. He noted that ETH’s drop to $2,100 may have triggered accumulation, which then led investors to withdraw funds from exchanges.

Pectra upgrade meets own roadbumps

Ethereum’s rollup-centric roadmap has reduced congestion and gas fees but introduced liquidity fragmentation.

The upcoming Pectra upgrade aims to address this by enhancing layer 2 efficiency and interoperability. By doubling the number of blobs, it reduces transaction costs and helps consolidate liquidity. Additionally, account abstraction allows smart contract wallets to function more seamlessly across Ethereum and layer-2 networks, simplifying bridging and fund management.

The Pectra upgrade rollout encountered setbacks on March 5 when it launched on the Sepolia testnet. Ethereum developer Marius van der Wijden reported errors on Geth nodes and empty blocks being mined due to a deposit contract triggering an incorrect event type. A fix has been deployed.

Magazine: Pectra hard fork explained — Will it get Ethereum back on track?

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