After 2017’s bull market that brought cryptocurrencies into the limelight and Bitcoin rocketing to its all-time high of $20,000, many are left wondering if it is too late to invest in cryptocurrencies.

Some believe that Bitcoin and cryptocurrencies have already peaked and that the gains investors saw over the last couple of years aren’t again possible due to the price of Bitcoin already being so high compared to the pennies it was originally worth. Others, believe that the crypto hype already passed, the bubble burst, and cryptocurrencies will never again have such high valuations.

While nobody knows what the future may bring for cryptocurrency investors, looking back at the past histories and price charts of cryptocurrencies like Bitcoin and Ethereum, as well as the histories and price charts of other important financial markets and assets could help predict the future of where the value of cryptocurrencies might be in the future.

This guide features historical price and chart data across a variety of markets that might help provide valuable insight into where cryptocurrencies like Bitcoin are headed.

Explaining Market Cycles

To best understand if it is too late to invest in cryptocurrencies, one must understand that all markets are cyclical in nature, and are dictated by the emotions and mental state of the investors and traders that are in each market.

Bitcoin and cryptocurrencies are textbook examples of how market cycles work.

Stealth Phase: Cycles begin as interest grows in an asset. This is first usually kicked off by “smart money,” such as hedge fund managers, and institutional investors. However, in the case of cryptocurrencies, due to the difficult to understand technology involved that never before existed, much of the early investors in Bitcoin were developers, tech enthusiasts, and evangelists seeking to disrupt the current financial system.

Awareness Phase: After the price of an asset rises enough, mainstream media gives the asset increased attention in headlines, thus creating hype around the asset that only increases. The hype and media attention causes the general public to buy in, causing the price of the asset to rapidly rise.

Mania Phase: Media attention turns to enthusiasm, which turns into greed and delusional exuberance.

Blow Off Phase: This is when “smart money” and more experienced institutional investors take profit and sell the asset, which causes the price of the asset to begin to decline. Once the general public realizes that their gains could soon turn to losses, they too begin selling, further driving down the price of the asset.

At first the public experiences denial, telling themselves “it’s just a correction.” Once the asset’s price further falls, full fear kicks in increasing the severity of the selloff. This is when capitulation occurs, and investors are often forced to sell their assets at breakeven or even at a loss to avoid further losses.

Despair and depression kick in, causing investors to feel anger toward the asset. It is during this time that interest cools off and allows the Stealth Phase to silently begin picking up traction.

Previously scorned investors are still angry at the asset, believe that any gains in the asset are just a “sucker’s rally.” This is when “smart money” begins buying in again, restarting the entire cycle.

Markets also experience other cycles that ebb and flow with certain timeframes, presidential elections, and other significant events.

Comparing Bitcoin and Crypto to Gold

Because of the “digital gold” moniker Bitcoin has been given by its “store of value” promoters, the first-ever cryptocurrency is often compared to the shiny, tangible, malleable metal asset.

Looking at the gold’s 100-year historical price chart in linear scale shows three distinct bubble cycles. Oddly, the peaks and troughs of the second gold bubble cycle looks eerily similar to the 2017 Bitcoin bubble that popped, and may point to the type of climb Bitcoin may see next.

Gold’s last peak corresponded with the stock market and real estate market rebounding after the global economic crisis that also sparked the creation of Bitcoin. Gold was often used as a hedge as other markets were falling, helping it see price growth during times of economical distress.

Bitcoin has one unique feature over gold that could give it unrivaled value in comparison: Bitcoin’s supply is hard-capped at 21 million bitcoins, while the supply of gold isn’t known, and miners can always continue to dig up more. With Bitcoin, there is no creating more bitcoins.

Because Bitcoin’s supply is capped, as demand rises, supply is only increasingly constrained and its value could be limitless.

Gold’s repeating bubble cycle shows that it’s never too late to invest in cryptocurrencies like Bitcoin.

Comparing Bitcoin and Crypto to the Dot Com Boom

While many investors do prefer the comparison between gold and “digital gold” as Bitcoin is often referred to, a better comparison could be made with the emergence of the Internet and the “dot com boom” as it's called.

As you already know, the Internet – like cryptocurrencies - started off as a misunderstood and often demonized technology that swept investors off their feet with its seemingly limitless potential. Internet-related stocks were said to be in a bubble that began with developers and programmers, until the media attention caused the rest of the world to take notice. The resulting “boom” caused the bubble to pop, and Internet stocks plummeted.

However, from the ashes of the dot com boom, rose Internet giants like Facebook, Google, and Amazon.

Looking at Amazon’s price chart below, the dot com bubble is only a tiny bump in Amazon’s overall growth trajectory. Amazon’s price charts prove that just because a bubble has popped, it’s never too late to invest in any asset that has unrealized potential.

Back then, Amazon was a mere book store, but today, it’s one of the world’s biggest brands that reaches across nearly every facet of ecommerce, and even has its own range of products now.

It took over ten years for Amazon to reach its dot com boom price, but since then, it’s brought investors some of the most substantial performance out of any Internet stock.

Amazon’s price chart and its rise from the dot com bubble pop are great examples of why it’s never too late to invest in cryptocurrencies.

Fun fact: The net worth of Amazon’s founder, Jeff Bezos, is currently at roughly $135 billion, which is more than double that of Bitcoin’s entire market cap of just $63 billion. Considering one man’s net worth is valued higher than all bitcoins in existence indicates that Bitcoin’s ascent has only just begun.

Comparing Bitcoin and Crypto to Previous Bitcoin Bubble Cycles

One final comparison cryptocurrency investors often make, is comparing Bitcoin’s current bubble cycle against previous ones.

Bitcoin is currently past the peak of its fourth bubble cycle, and most analysts expect Bitcoin’s bubble cycle to repeat again and again until its true value is finally realized.

The bubble cycles seem to happen more frequently with Bitcoin than other assets because of how little it is understood, and the effect the hard-capped supply has on demand, as well as the effect each “halving” has on Bitcoin’s supply and demand. Each “halving” reduces the amount Bitcoin miners are rewarded for adding a block to the blockchain by 50%.

Bitcoin first had a bubble in 2011, taking its price from under a $1 to nearly $30 per Bitcoin.

Its second bubble occurred in 2013, taking the price of the asset from around $10 to $220 at its peak.

The third bubble popped after Mt. Gox was hacked and lead to a long arduous bear market. This bubble cycle saw the price of Bitcoin skyrocket from around $100 to $1,000, before crashing back down to around $200. As you can see in the price chart below, the third bubble cycle was barely a blip on Bitcoin’s overall price chart, and is very similar to how the dot com bubble on Amazon’s chart looks today.

It wasn’t until Bitcoin broke the previous peak of over $1,000 when the most recent bull run began, sending Bitcoin on a meteoric advance to its all-time high price of $20,000.

All in all, Bitcoin’s price went from literally worthless, to its first ever recorded price of $0.08 (according to Wikipedia), to $20,000. So while Bitcoin is currently trading at $3,500, at its peak from its lowest recorded price, Bitcoin brought its earliest investors as much as 25 million percent gains. Gains that are completely unheard of in any other asset class or market type.

With Bitcoin falling back down to $3,500, even an increase back to its previous all-time high would bring investors a 470 percent increase. That too trumps nearly every other asset type in terms of potential gains.

Is It Too Late to Invest in Crypto or Bitcoin?

In closing, it’s never too late to invest in any asset, and certainly not a new, emerging asset class like cryptocurrencies.

All markets move in cycles and the cryptocurrency hype that once existed in 2017, has turned into despair and depression, suggesting that now is the best time to invest in cryptocurrencies for the biggest potential gains.

Keep in mind the famous contrarian investing quote popularized by Baron Rothschild: "the time to buy is when there's blood in the streets.”

There is blood in the streets with cryptocurrencies. Will you be buying?