The initial October optimism that pushed Bitcoin (BTC 1.75%) to a new high has quickly faded. On Friday, Oct. 17, Bitcoin slipped below the $105,000 mark -- a 17% drop on its Oct. 6 peak of over $126,000. Prices moved slightly higher over the weekend, but uncertainty rules as investors try to make sense of credit concerns and the largest liquidation event in crypto history.
An unexpected China tariff threat on Oct. 10 jolted markets and triggered a cascade of liquidations. CoinGlass data shows that over $19 billion in leveraged positions was wiped out in what's being called "Crypto's Black Friday." The flash crash, and concerns about private credit quality, are driving a wider risk-off sentiment.
For investors, this raises the question of whether it is a good time to buy. That depends a lot on your investment thesis.
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Is it time to buy Bitcoin?
When cryptocurrency prices fall, there's often a rallying social media cry to "buy the dip." It sounds great in theory, but it isn't always that simple in practice. For starters, it is almost impossible to know how far Bitcoin might fall so you can call the bottom. There's also no point in trying to buy the dip if you don't think Bitcoin has long-term potential.
In terms of the dip itself, it's worth noting that Bitcoin's price is still up about 60% year over year, and that cryptocurrency investors are used to dramatic price swings. That doesn't stop these big drops from being unnerving. Even so, there's solace to be taken from the fact that Bitcoin has always erased its losses and gone on to set new highs.
While there are no guarantees, Bitcoin could have long-term potential, and various institutions like ARK Invest are optimistic about its future. ARK's most bullish price target for the lead crypto is $1.5 million, based on its potential as an emerging market currency, an institutional asset class, and even as "digital gold." In its latest report, ARK points out that Bitcoin balances in corporate treasuries increased by 40% in 2025, and that spot Bitcoin ETF balances have reached new highs.
Bitcoin's digital gold credentials are questionable
One notable driver behind Bitcoin's growth in 2025 is that it appears to be maturing as an asset. The influx of institutional funds not only buoyed the price, but it also reduced volatility. That gave more credence to the argument that Bitcoin could act as a form of digital gold -- a store of value that may hold its worth over a long period.
Any hedge against uncertainty has a lot of appeal today, as people look to protect their investments against inflation and a softening dollar. It's true that Bitcoin and gold have a lot in common. For example, only a fixed amount of Bitcoin can ever be mined. Bitcoin is decentralized and can't be controlled by individual governments. The blockchain is durable and, like gold, should stand the test of time.
However, Bitcoin has yet to fully prove itself as a safe-haven asset. Take October: Gold has continued to trend upwards and reach new highs, while Bitcoin erased many of its gains from the past three months. It isn't the first time that Bitcoin has behaved more like a tech stock than a form of modern-day gold. For example, in 2022, when the Federal Reserve introduced dramatic interest rate hikes to combat inflation, Bitcoin's price tanked alongside other high-risk investments.
Bitcoin is still a relatively new asset, and it may still develop as a form of digital gold. It may also have other potential use cases that push it upwards, particularly with a pro-crypto administration in power in the U.S. However, recent weeks have shown us that it is not there yet.
Don't buy Bitcoin just because the price has dropped
If you've been watching Bitcoin's price soar this year and wondering when might be a good time to get in, the recent drop may make it more attractive. But what counts is your long-term rationale for investing in Bitcoin. This especially matters if you're looking for a safe-haven asset. In that case, Bitcoin may not be the best choice, even at a lower price. The digital gold narrative is questionable and may not hold up under pressure.
There's also the challenge of knowing how far Bitcoin might fall. Bear in mind that it dropped almost 75% in the year that followed its Nov. 11, 2021 peak. Dollar-cost averaging -- buying smaller amounts at regular intervals -- can help to manage this type of volatility.
However, if you think it has potential in other ways -- whether that's institutional and corporate accumulation, government treasuries, or through emerging market currencies -- today may be a good time to buy. Bitcoin is maturing and regulatory changes are clearing the path for increased mainstream adoption. Bitcoin ETFs make it more accessible and take out a lot of the headaches over custody.
We've seen Bitcoin eventually recover from extreme price dips, and there's a good chance it will soar once again. What matters is to be clear about your investment rationale, and make sure that Bitcoin is a small part of a wider risk-adjusted portfolio.
