Recommendations:
Investors should consider purchasing cryptocurrencies during the late summer months—May through August—when historical returns have generally been lower. This strategy could allow investors to buy at lower prices ahead of potential recoveries and strong year-end performances typically seen in November and December.
Bitcoin Price and Monthly Returns (2014-2021):
| Year | Opening Price | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2014 | $770 | +9.8% | -36.2% | +10.5% | +48.2% | -23.0% | +1.3% | -3.0% | +18.6% | -19.1% | +15.9% | +14.2% | -16.5% |
| 2015 | $320 | -27.3% | +22.2% | -4.1% | +0.8% | +4.1% | -7.8% | +1.8% | -18.7% | -2.7% | +28.5% | +14.0% | +21.8% |
| 2016 | $434 | -14.6% | +18.2% | +3.3% | +8.3% | +21.4% | -10.7% | +7.6% | +8.1% | -5.7% | +13.4% | +28.5% | +31.4% |
| 2017 | $998 | +0.2% | +18.6% | +8.5% | +26.2% | +66.0% | -6.0% | +15.3% | +64.6% | +2.1% | +47.4% | +54.2% | +39.0% |
| 2018 | $13,880 | -21.9% | +1.0% | -32.0% | +33.5% | -19.0% | +14.5% | +21.5% | -9.1% | +2.9% | -3.8% | -36.5% | -7.1% |
| 2019 | $3,746 | +7.8% | +11.2% | +8.2% | +28.8% | +61.8% | -6.2% | -4.4% | +2.3% | -13.5% | +10.2% | +42.4% | +8.4% |
| 2020 | $7,194 | +29.9% | -8.4% | +24.0% | +34.2% | +9.4% | -2.8% | +24.5% | +3.0% | -7.5% | +28.0% | +43.6% | +47.1% |
| 2021 | $29,374 | +14.0% | +36.0% | -2.4% | +40.0% | -35.3% | -5.9% | +18.2% | +12.9% | -7.0% | +40.0% | -7.0% | -18.5% |
Analysis and Recommendations:
From this data, a few trends can be observed:
- January: Mixed results; shows significant volatility. Good buying opportunities might exist in years following a strong December.
- March to May: Generally positive months with good returns, especially noticeable in recovery years following a downturn.
- June to August: These months can be volatile; often, they provide buying opportunities, particularly if the previous months have shown strong positive momentum.
- September: Often a weaker month, which could suggest a buying opportunity.
- October to December: Typically strong months, particularly evident in years following a weak September.
Best Months to Buy:
- March: Often a rebound month, following typically subdued performance in January and February.
- September: Historically weaker, potentially offering lower entry points before the usually strong end-of-year rally.
- After significant drops: Months following significant declines might offer attractive entry points as Bitcoin has historically shown resilience and potential for strong rebounds.
Conclusion:
This data-driven analysis suggests that while there are certain months that consistently show better potential for purchases based on historical returns, the highly volatile nature of Bitcoin necessitates a cautious approach. Always consider external factors such as regulatory changes, market sentiment, and global economic conditions. Additionally, verify the latest data from reliable sources before making any investment decisions.