So you’re wondering when is the right time for your church to get into Bitcoin? It might come as a surprise that we don’t necessarily recommend going all in right away.
Many zealous Bitcoiners get excited when people are ready to “smash buy,” but it isn’t always the most prudent course of action, even if it might result in the best outcome. Keep in mind that we’re all working toward a generational mindset, and our attitudes should reflect that in our patience.
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 first, let’s start with a quick reminder from Ecclesiastes:
For everything there is a season, and a time for every matter under heaven.
Ecclesiastes 3:1
Bitcoin has its seasons
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.
Earlier in this series 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. There’s a popular meme on what it’s like to HODL, and I can tell you from personal experience, it’s very accurate.
This is because, 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.
Why a log scale changes everything
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 that 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 y-axis increases by a power of 10 rather than linearly. 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 halving and the four-year cycle
That is, the block reward for miners is cut in half every four years at “the halving,” which effectively reduces the 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 of any 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 continue to be accurate.
Michael Saylor has an alternate take in his talk 21 Rules of Bitcoin, where the 12th rule states that all your models will be destroyed.
Living through the volatility
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 that 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. That means your church may be more likely to listen to you and adopt Bitcoin during such a market — but it also means they could experience several years of pain while they’re underwater in 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’ve already stated, Bitcoin shouldn’t be considered an investment position that you constantly assign a fiat price to; rather, it should be viewed as savings, and ultimately used as a unit of account — meaning that at some point, you start to denominate prices and account balances in terms of Bitcoin and not dollars or other fiat currencies. Unfortunately, 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 is nearly impossible to resist, especially if we continue to use those currencies as our unit of account.
Conviction over timing
So, as you might guess, your experience 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 has a good understanding and level of conviction, getting in during a bull market may be the right time. 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.
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 turn out to 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?
What endures forever
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.