With Bitcoin trading at around $100,000 and the rest of the crypto market following in its direction, it could seem logical to buy Bitcoin and hold for potential gains. However, not everyone holds this view.
Lark Davis, an expert analyst on YouTube with more than 600,000 subscribers, thinks it is a bad idea to buy Bitcoin for profit in 2025 due to some factors.
What you'll learn 👉
Understanding the Market Cycle
Davis mentioned that Bitcoin contains half of his crypto portfolio, and despite his strong belief in Bitcoin’s long-term potential, he emphasizes that even the “king of coins” follows some cyclical patterns.
“The cryptocurrency market moves in pretty brutal cycles,” Davis explains, noting that these patterns have remained relatively consistent over the years. The cycle typically begins with a recovery year where smart money enters at low prices, followed by a bull market uptrend in the second year.
The third year, which is 2025, usually marks the market peak before leading into a bearish fourth year characterized by significant price crashes.
The Risk of Late Entry
According to Davis, investors considering Bitcoin purchases around the $100,000 mark in 2025 should proceed with caution. He points out that Bitcoin has already seen a 500% increase from its November 2022 bottom. This suggests that latecomers might be entering during the market’s euphoric phase.
The experienced analyst warns that the market’s volatility can be particularly treacherous during these later stages. “The closer we get to the peak, the higher the risk becomes,” Davis cautions, explaining that short-term investors at this stage might face minimal gains with substantial downside risk.
The Reality of Diminishing Returns
One of the most compelling arguments Davis presents involves Bitcoin’s historical pattern of diminishing returns. He illustrates this through Bitcoin’s previous cycles:
- 2011: A 600x return from $2 to $1,200
- 2015: A 120x return from $166 to $20,000
- 2018-2021: A 21x return from $3,000 to $67,000
This pattern suggests that while Bitcoin remains a strong long-term investment, the potential returns in 2025 might be significantly lower than in previous cycles. Davis estimates that best-case scenarios might offer 100% to 150% returns, a far cry from the astronomical gains seen in earlier years.
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A Shift in Investment Strategy
Davis makes an important distinction between Bitcoin as a store of value and as a means to generate wealth. While he maintains that Bitcoin remains an excellent hedge against fiat currency, he suggests that investors seeking substantial returns in 2025 might want to explore alternatives.
The analyst points to the potential of select altcoins during the latter stages of the market cycle. However, he cautions that careful selection is crucial, as most alternative cryptocurrencies eventually become worthless. Davis specifically mentions emerging blockchains and certain trending tokens as potentially offering higher percentage gains during the market’s euphoric phase.
Long-term Perspective Required
In his concluding remarks, Davis emphasizes that Bitcoin’s strength lies in its long-term potential. “Bitcoin isn’t a ‘get rich quick’ scheme—it’s a ‘don’t go broke slowly’ scheme,” he states, highlighting the importance of extending one’s investment horizon from months to years.
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The cryptocurrency expert advises that those determined to invest in Bitcoin during 2025 should adopt a long-term mindset and be prepared for potential market downturns. Rather than trying to time the market perfectly, Davis suggests using any subsequent bear market as an opportunity to accumulate Bitcoin at discounted prices.
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Follow us on X (Twitter), CoinMarketCap and Binance Square for more daily crypto updates.
Get all our future calls by joining our FREE Telegram group.
We recommend eToro
Wide range of assets: cryptocurrencies alongside other investment products such as stocks and ETFs.
Copy trading: allows users to copy the trades of leading traders, for free.
User-friendly: eToro’s web-based platform and mobile app are user-friendly and easy to navigate.
