We’ve covered a lot of ground already in this series, and one of the recurring themes you may have picked up on is timing.
In this part we’ll look at timing from a macro perspective — in terms of market cycles, and how getting into Bitcoin at different times can drastically alter your experience. But before we get into that, let’s recap what we’ve already covered from an individual and organizational perspective.
The timing we’ve already covered
First, in Spreading Bitcoin With Love, I encouraged you to consider whether the timing is right for you to share Bitcoin with your church as an individual. If your heart isn’t in the right place, or you’re likely to share Bitcoin in an unkind or unloving manner, you may need some more time to prepare and ask the Lord to soften your heart.
Next, in Know Your Audience, I discussed the idea that if your “right person” is too busy or stressed out, it may not be the right time for them. Of course, this may mean they aren’t the right person, but it could also mean you just need to be patient and wait for the right time.
Finally, in Reasons to Care About Bitcoin, we talked about considering the financial situation of your church as an organization. For example, if your church is in a high–time-preference financial situation — meaning they are focused on spending money in the present, perhaps out of necessity — it may not be the right time to recommend getting into Bitcoin.
But assuming it is the right time for you, the person you’re talking to, and your church, let’s look at the macro level — after a quick reminder from Ecclesiastes:
For everything there is a season, and a time for every matter under heaven.
Ecclesiastes 3:1
Like every other matter under heaven, Bitcoin has its own seasons, and sometimes those seasons can swing wildly between positive and negative extremes, especially when comparing it to other financial instruments.
What it’s like to HODL
In Saving Versus Investing, we discussed why comparing Bitcoin to other capital goods isn’t necessarily apples to oranges, and we also presented a different take on its volatility. But knowing these truths and living through the euphoria of a Bitcoin bull market — and then the despair of a bear market — are two totally different things.
You may have seen the “What it’s like to HODL” meme, and I can tell you from personal experience, it’s very accurate. If you look at the price chart of Bitcoin, it’s plain to see that there are brief periods of parabolic run-ups, typically followed by much longer periods of catastrophic drawdowns and years of grinding sideways.
The media loves to proclaim that Bitcoin is dead after the drawdowns, but unlike tulips after Tulip mania, Bitcoin keeps coming back from the dead. Part of the issue is that people often view Bitcoin charts on a linear scale, like stocks, and this scale can really only show the latest run-up or crash.
Inevitably, people will draw the conclusion that we’re in a bubble, or the bubble has burst — and in either case, that it’s an unwise time to get in. However, as Lyn Alden points out in her article 7 Misconceptions About Bitcoin, it can be more helpful to view Bitcoin on a log scale — that is, where each unit on the axis increases by a power of 10 rather than linearly.
The four-year cycle and the halving
When you do this, it’s much easier to spot the four-year cycle that many have theorized is caused by the underlying mechanics of the supply issuance schedule. The block reward for miners is cut in half every four years at “the halving,” which effectively creates less supply of new Bitcoin flowing into the market relative to the existing stock.
This, of course, will drive the price higher in the face of steady or increasing demand, and this is why you might hear people say things like “Bitcoin is programmed to go up” — or, in other words, that Bitcoin is “number go up,” or NGU, technology.
The concept of stock-to-flow is well understood, especially in other commodity markets like gold, and it’s interesting to note that as of the 2024 halving, Bitcoin now has the highest stock-to-flow ratio relative to any other commodity — meaning it is the hardest, or most scarce, asset by this metric.
Many Bitcoin personalities, such as Plan B and Rational Root, have become well known for their price models, which in large part are based on stock-to-flow — but only time will tell if these models will continue to be accurate. Michael Saylor has an alternate take in his talk 21 Rules of Bitcoin, where the 12th rule states: all your models will be destroyed.
History looks smooth; living it doesn’t
The point is this: looking at the history of Bitcoin, especially on a log scale, can make the price increase seem obvious and smooth. Alternatively, having your own skin in the game and living through the price history can be terrifying, especially without the proper level of understanding and conviction — which can only be achieved by putting in the time to study it.
To make matters worse, interest in Bitcoin usually peaks during bull-market run-ups, meaning your church may be more likely to listen to you and adopt Bitcoin during such a market — but this also means they could experience several years of pain when they are underwater on their position.
Of course, viewing Bitcoin as a “position” and constantly valuing it in terms of fiat currency is part of the problem. As we already stated, Bitcoin shouldn’t be considered an investment position that you constantly assign a fiat price to, but rather it should be viewed as savings and ultimately used as a unit of account.
And while all this may be well and true, the fact remains that, in a sense, we’re all recovering from living in the fiat matrix, and the temptation to compare Bitcoin to the dollar or other currencies is nearly impossible to resist — especially if we continue to use those currencies as our unit of account.
So when is the right time?
As you might guess, the conversations you’ll be having will be flavored by the particular time your church chooses to start adopting Bitcoin, which is likely to be during a euphoric run-up that’s followed by years of disillusionment.
If you feel like your church leaders have a good understanding and level of conviction, getting in during a bull market may be the right time for your church. But if not, it may be wise to wait — or at least ease into the position. Not necessarily for a dip, or even a crash, but until conviction is developed.
We’ll discuss more about position sizes and allocation strategies in a future part, but to be clear: we aren’t suggesting that you and your church try to time the market, but rather that you be honest about your knowledge and feelings in order to protect yourselves.
Again, waiting a bit longer may not be the best financial decision in hindsight — but hindsight is 20/20, and only God knows the future. In the end, your church isn’t too late to Bitcoin, and a few more months or even years isn’t going to change that fact. For more on why we aren’t too late, check out Bitcoin University’s video Too Late To Buy Bitcoin?
And with that, I’ll leave you with a word of encouragement, again from Ecclesiastes chapter 3, this time verse 14:
I know that everything God does will endure forever; nothing can be added to it and nothing taken from it. God does it so that people will fear him.
Ecclesiastes 3:14
As great as Bitcoin is, it won’t endure forever. Instead, we fear the LORD, whose steadfast love endures forever. Count on the LORD and his works when the hard times come, and you will be able to endure all things.