The Expensive Feeling

There’s a reliable pattern in how Bitcoin feels to buy at different points in its cycle.

At the bottom — when the price is low, sentiment is negative, and the asset represents the best value — it feels dangerous and foolish to buy. Everyone who was excited has gone quiet. The news is bad. Buying feels contrarian in the uncomfortable sense, not the clever sense.

At the top — when the price is high, sentiment is euphoric, and the asset represents the worst value — it feels exciting and obvious to buy. Everyone is talking about it. The news is extraordinary. Not buying feels like missing out.

This inversion — where the asset feels most expensive exactly when it offers the most value, and most exciting exactly when it offers the least — is not unique to Bitcoin. It’s how human psychology interacts with any volatile asset. But Bitcoin’s volatility makes it more extreme than most.

The mechanism behind it is simple. Price creates narrative. When Bitcoin rises, the narrative is optimistic. When it falls, the narrative is pessimistic. Most people respond to narratives — not to underlying fundamentals. So they buy when the narrative is good (price is high) and sell when it isn’t (price is low).

Long-term Bitcoin holders describe learning to notice this feeling — the expensive feeling at the top, the cheap feeling at the bottom — and treat it as information rather than instruction. The feeling is real. Acting on it reflexively tends to produce the opposite of the intended result.

Tomorrow: the halving and what it actually does to supply.

— The Daily Bit