This is probably the age old question of whether we should be getting in to the crypto market right now? For small retail investors like us, we should always consider the ups and downs in the short term as well as for the long term. Yes it does sound rather “cheesy” and obvious. But lets be honest here, it is the most important as well. So should we be getting more Bitcoins now? I am here to give some insights and my recommendations. Of course I am not an financial advisor and you should always do your own research when it comes into investing.
The first question is the ask how low do you think Bitcoin will go? It has already dropped quite significantly since May 2021 and is currently about half of its peak price. So do you think it will go any lower than that, even during a bear market? For me, I think it will not go much lower than what it is currently now. The reason is simple – there are a lot of financial institutions holding Bitcoins right now. If it goes too low, how will it look for their portfolio? No matter what, they will still need to answer to their shareholders. And if their portfolio value look bad, they might be kicked off their job very quick. We are talking about hundreds of millions of dollars in assets. Some institutions hold billions of dollars of Bitcoin as well. And even if it does drop much further, it will only be for the very short term. With backing by quite a number of high profile investors and institutions, I would say Bitcoin is a safe bet.
And the price at the moment looks very attractive for investors too. Looking at historical charts and if you are thinking of the long term, I think it is hard for Bitcoin to go further down. Sure it is more or less trading sideways these few weeks but kind of difficult to buy only at the lowest dip right? So if you are thinking of the long term, I am guessing now is a good time to get more Bitcoins into your portfolio. I won’t say it will never go down to this level anymore because I don’t have a crystal ball. But historically speaking, it will go up. Might not pump like during the bull market but I believe it will go up gradually.
We should also not forget that traditionally Bitcoin is considered a “safe heaven” for the crypto market. By safe heaven, I mean for investors to put their funds in during the volatile times. And the crypto market is currently extremely volatile. So yes there will be an increased demand for Bitcoin. There is a saying that if the crypto market is “boring”, then you should look at Bitcoin. I feel it is true. Yes stablecoins are something which traders will look at as well. But Bitcoin can actually go up in value while stablecoins are pegged to a fiat currency, hence the name Stablecoin. Of course if you would like a safer route, yes Stablecoins would be the way to go.
So if you are into investing into crypto, no matter what, Bitcoin should be in your radar. But remember as a small scale investor, you should never dump all your funds into one asset. And always invest only what you can afford to lose. The crypto market is still one of the most volatile asset class and quite a lot of crypto “shitcoins” out there can be wiped out in mere minutes. And when choosing which to invest in, go for the ones with the biggest marketcap you can find. Sure, it will probably never reach 100x but you can be quite certain it will still be around next year. Admittedly I am currently not holding any BTC in my portfolio at the moment. For those who have been reading my blog would understand why. But I think it is now the right time to get into Bitcoin. By the next pay day, I will be getting my little stubby hands on some BTC!
Here is a post which I have written on why I think Bitcoin is still relevant. Hope that it will all make more sense. Please take care!