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Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.

Crypto moves in cycles. There are programmatic cycles, like bitcoin’s supply halving every four years. There are hype cycles, where the latest technologies capture public attention, promise the world and then cannot deliver. Then there are cyclical movements in price: what comes up often comes down.

This article is excerpted from The Node, CoinDesk's daily roundup of the most pivotal stories in blockchain and crypto news. You can subscribe to get the full newsletter here

Bitcoin, rangebound below $60,000 for weeks, is now changing hands below $40,000. Does this portend a reckoning? A correction? Some see it as a buying opportunity.

They will tell you, “BTFD.” Buy the dip, as it were. Let’s decode what the meme means.

It means to buy the dip.

Don’t overcomplicate it.

(Please don’t take investment advice from someone who writes about memes. And be wary of taking investment advice from memes.)

It’s a reminder that even though bitcoin is volatile, it trends up.

In 2015, bitcoin advocate Alex Millar released a video that offered unconventional investment advice for the crypto industry. “Don’t buy bitcoin,” he said. “It’s going to crash.”

Zooming out on a multi-year chart, Millar looked at the notable boom-and-bust cycles in bitcoin’s trading history. Bitcoin, in 2011, he said, went from 6 cents to 36 cents, then crashed. Months later, it went from 85 cents to approximately $29 before cratering to $3. In January 2014, bitcoin was trading above $1,000. The next year, one BTC was worth $239.

The trend is clear: Bitcoin will crash. Left unsaid was that in four years bitcoin went from being worth pennies to dollar parity to swinging between a few hundred and a few thousand dollars, with downward swings in between.

At the time, Millar cautioned against buying the dip. “You know it’s going to crash,” he said. It seems like he’s changed his tune.

“As an investor, you gotta ask yourself if an asset is worth its price. If you answer yes, then you gotta buy. And if the price then decreases from there for bad reasons, you need to double down if you want to respect your original analysis,” Millar told CoinDesk in a direct message.

It’s a show of solidarity.

Cryptocurrencies are novel – largely unproven – technological and monetary systems. Assets like BTC, ETH or DOGE buck the investment wisdom taught in prestigious business schools. They lack the cash flows or expected returns that historically have been used to value stocks or start-ups. Instead, crypto trades based on user demand and investor sentiment. All bitcoiners have is a codebase, community and a story to tell.

That goes a way toward explaining all of bitcoin’s death pronouncements over the years. The “greater fool” analysis of crypto, or the idea the price will continue to go up as long as new investors can be persuaded to buy in, must lead to a cataclysmic crash, critics say. Every dip could be that great unravelling, when the crowd suddenly gets wise.

Crowds are known as much for their wisdom as their madness. Buying the dip is just picking a side.

Where FOMO fits in.

On trading forums, the saying is, “The best time to buy bitcoin was 10 years ago. The second best time is now.” Trying to time markets is tricky and there is always a fear of missing out (FOMO). Bitcoiners have developed a trading strategy to mitigate both risks: Amass as much bitcoin as possible and never sell. A dip is just a reminder to buy.

It is an expression of a deeper belief.

Sometimes an investment is more than a simple allocation of capital, a calculated bet that something may be more valuable over time. Sometimes, an investment is emotionally or politically motivated.

The “smart money” that has moved into bitcoin this past year has often followed a galaxy-brained investment thesis. Paul Tudor-Jones, a hedge fund manager credited with sparking the institutional wave into bitcoin, said the cryptocurrency could become an inflation hedge. Another outsized fund manager, Stanley Druckenmiller, said bitcoin is on its way to becoming a global reserve currency. Meanwhile, Twitter and Square CEO Jack Dorsey has long said bitcoin will be the native currency of the internet.

If bitcoin succeeds in any of those roles it would be massive. But there is another motivation many hardcore bitcoiners are motivated to buy as much as they can: It is stealing power from the state.

I'll leave you with one thought, what happens when the dip keeps dipping?

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