As Bitcoin and Ethereum Soar, Should Investors Hop Onto the Crypto Train or Wait for Prices to Drop?

Key Points

• It's reasonable to be hesitant about buying during a powerful rally.

• That doesn't mean you should always avoid doing it.

• Waiting for lower prices is a choice that does not always pay off.

• 10 stocks we like better than Bitcoin ›

The cryptocurrency markets are having an absolutely sizzling summer. Bitcoin (CRYPTO: BTC) recently topped $123,000, Ethereum (CRYPTO: ETH) vaulted above $3,700, and Solana (CRYPTO: SOL) trades for more than $195 after a steep climb. All three coins are up between 34% and 137% in just the past three months, with Ethereum being the pacesetter and Solana and Bitcoin the runners-up.

That kind of linked movement raises a classic dilemma for investors: Is it smarter to chase the strength and buy coins now, or wait for the inevitable pullback?

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History says crypto does deliver violent corrections regularly, yet it has also said that sidelining cash during bull markets has cost investors much more than the subsequent crashes ever did. Let's shed some more light on this issue and determine what the best course of action is.

Image source: Getty Images.

The rally still has legs

The macroeconomic and monetary factors at play today all point toward the crypto sector's bull run having plenty of juice left.

First, central banks from Europe to China are already cutting their interest rates, thereby reducing the cost of borrowing and increasing liquidity, and there is likely to be more easing through the end of the year, potentially in the U.S. as well. Cheaper money usually finds its way into risk assets like crypto, which tends to act like a levered bet on that rising tide.

Second, institutional demand is here, and it's powerful. June saw $4.6 billion worth of inflows into Bitcoin exchange-traded funds (ETFs), propelling the coin to record highs. The same institutional desks are now green‑lighting Ethereum allocations, and other cryptocurrencies may soon be on the docket as well.

Newfound regulatory clarity might be the strongest accelerant of all here. On July 18, the Guiding and Establishing National Innovation for U.S. Stablecoins Act (Genius Act for short) was signed into law, thereby providing a legal framework for bank‑issued stablecoins. The industry's biggest policy overhang of the past five years is finally starting to abate.

Lastly, momentum is broadening beyond the big two coins. Solana's tokenized real‑world asset (RWA) value has jumped 140% year to date to reach more than $418 million as of July 14. That's double the growth rate of the wider RWA market.

Much of that spike comes from xStocks, a joint venture between two of the biggest centralized cryptocurrency exchanges -- Kraken and Bybit -- that now lists 60 tokenized U.S. equities tradable 24/7 with instant on‑chain settlement.

Growing uses like these reinforce the idea that crypto's sandbox is turning into real infrastructure, and capital is already flowing in to reflect the change.

How to climb aboard without losing sleep

It's no secret that rallies of this size generate fear of missing out (FOMO) and its shadow, regret. Resisting FOMO is key, especially if you accept that this rally is nowhere close to being over -- impulsive buying can easily lead to disaster.

Crypto remains habitually volatile. Assuming you jump in with a lump sum at the wrong moment, a routine flash crash can sting hard enough to force an ill‑timed exit. And, generally speaking, investing without a long-term plan for how to manage the investment is a recipe for heartache. Don't assume that this uptrend will last long enough to make you rich, because it will not.

Instead, now is a great time for dollar-cost averaging (DCA). Buy a set dollar amount of your preferred coins on a schedule, and you will smooth your entry price across bull and bear stretches alike. Over multiyear horizons, it reduces the chance that short‑term volatility leads you to make an actual investing mistake.

This method does not eliminate risk. Bitcoin fell very sharply in 2022, and a similar drawdown will happen again. But if your horizon is five years or more, the probability of negative returns shrinks dramatically, especially when underlying adoption and policy support keep expanding.

In closing, crypto's train is already leaving the station, and it may be hauling new cars behind it for a while. Stepping aboard with discipline beats waving from the platform hoping for a cheaper ticket. Don't worry if you don't hop on at the perfect moment -- it's the direction of travel that matters the most.

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Alex Carchidi has positions in Bitcoin, Ethereum, and Solana. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Solana. The Motley Fool has a disclosure policy.