What If Youre Interested In Crypto But Havent Yet Invested
Yangs set it and forget it approach to crypto reflects his philosophy for investing in the traditional stock market, but some experts feel cryptocurrency is too different from traditional investments to draw any historical comparisons. Thats why AShira Nelson of Savvy Girl Money is staying well away.
Nelson primarily invests in low cost index funds because I can see history on that, she says. The newness of cryptocurrency and lack of trackable data make her wary of these crazy swings.
Potential investors looking to buy the dip should understand that fluctuations are par for the course, and be prepared for this kind of volatility going forward. Even if you invest now, with prices relatively low, be prepared for them to fall even more. Again, only put in what youre comfortable with losing after youve covered other financial priorities, like emergency savings and more traditional retirement funds.
What Is The Future Of The Cryptocurrency Industry
Is the market crash the end of the crypto industry? A big fat no! if anything, it has further brought the crypto industry under the spotlight. A report from a data analytics platform revealed that the social volume of Bitcoin has surpassed that of the 2017-2018 bull run which is huge.
In four years, the next halving of Bitcoin can be expected which will, most probably, result in another bull-run. Yes, a market crash will follow but the five-year price projections of many cryptocurrencies place them at highs that are currently unfathomable. For example, Bitcoin is expected by Wallet Investor to have a price level of $182,164 which will become a possible price target after the next bull run.
The importance of the blockchain technology has also been realized by many. A lot of Wall Street giants and corporate behemoths that were skeptical of cryptocurrencies in the first bull run have accepted cryptocurrencies in some shape or form. Banking giants like JPMorgan & Chase, Goldman Sachs have included cryptocurrency offerings. PayPal and Mastercard have also added cryptocurrencies to their platform. Moreover, Bitcoin and other cryptocurrencies have become an integral part of corporate balance sheets with MicroStrategy, Tesla and the likes having sizeable holdings.
Is The Crypto Bull Run Over
Coindesk data suggests that the Bitcoin bull run is intact. The histrionics of May 19 amounted only to a correction.
Regular crypto investors seem to share the same view. In a Twitter poll by crypto influencer Lark Davis, 55% of respondents believed the crypto bull run was not over.
Of course, regular investors are not always the best judges of investment matters.
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Bitcoin Crash: Experts Say Volatility In Cryptocurrencies Likely To Continue
Sharp sell-off follows El Salvador’s crypto experiment
Though many cryptocurrencies have recovered from Tuesday’s sharp sell-off, high volatility is to remain.The global cryptocurrency market capitalisation is around $2.09 trillion-a decrease of 0.64 percent in the past 24 hours. Both Bitcoin and Ethereum dropped by more than 7 per cent in the past week with the overall cryptocurrency market dipping by around 15 percent worldwide on September 7.
The sell-off came after El Salvador declared Bitcoin to be legal tender. So should crypto investors be wary about cryptocurrencies given the high level of volatility? Experts with whom THE WEEK spoke feel that Bitcoin and crypto assets will continue to show volatility as they are still considered new assets in their nascent stage.
Bitcoin and crypto asset classes will continue to show volatility due to many factors, the regulatory view on investor protections behind the crypto asset class. Currently, fiat currency and fiat assets are backed by the guarantee of the central bank who keep pushing quantitative easing and keep pursuing the asset expansion, which is causing investors to heavily bet into equity class assets globally. This real asset class expansion is 500 times more than the size of the Bitcoin and crypto space, remarked Sudin Baraokar, Global IT and Innovation Adviser.
How Are Things Panning Out In The Crypto Market
Thecrypto market has had a forgettable past month, with Bitcoin falling nearly 50%in May alone.
Overall,this highlights for many the concerns that have always defined the asset class,i.e., volatility and so many unforeseen variables.
Ofcourse, such moves in the cryptomarketare nothing new, especially for investors who have braved the elements of the2017 run up and subsequent crash. A more pressing question in the immediatefuture is whether last month’s crash is a temporary construct or signs of adeeper malaise.
BitcoinSetting the Pace
Investorsshould look no further than the paramount crypto, Bitcoin, which appears tohave achieved some stability over $35,000 in recent days. That being said,BTC’s next moves will be crucial.
Sincethe price of BTC dropped below $40K in mid-May, the price of the asset has oscillatedbetween the $32,000-$38,000 range.
Indoing so, BTC has never quite managed to build enough support to recapture the $40,000.
Analystsare pointing to a key level of support at $35,000, which if it continues tobuild, could result in a meaningful and sustained movement toward $40K andabove.
Ofnote, this move would not be so pumped on leverage. However, price action inrecent days has been very choppy. On the flip side, BTC could enter a newperiod of price discovery on the lower end.
Isthe Crash Overblown or Signs of a Chief Concern?
This could be a key factor for many other cryptos moving forwardin the short- and long-term.
BuckleUp for More Volatility
Role of Ethereum
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Why The Big Short Guys Think Bitcoin Is A Bubble
During the past year of COVID-induced market mania, cryptocurrencies have gone up so much bitcoin is up about fivefold, while many other crypto projects are up far, far more that even reluctant Wall Street institutions have begun to tiptoe into the arena. A blazing rally that began this month has helped bitcoin shoot up nearly 50 percent in two weeks. It was driven by various pieces of news for instance, George Soross family office disclosed that it holds some but the biggest force was the increasingly certain expectation that the federal government will approve the first bitcoin-based exchange-traded fund, which will allow retail investors to buy in more easily, including for 401 accounts. But doubters remain and their ranks just happen to include many of the same prominent investors who saw the financial crisis of 2008 coming.
Other famous critics include economist Nouriel Roubini, one of the few in his profession to predict the financial crisis, and hedge-fund billionaire and hard-money acolyte Paul Singer, whose speech at a prestigious investment conference in 2006 described the eventual wipeout of mortgage securities.
Green says he began looking into bitcoin because clients were clamoring to invest in it. As I dug into the actual underpinnings, it just became very clear that what was actually going on was cultlike behavior with no real understanding of the asset or the economic implications for the model that it was proposing, he says.
Prices Of Major Cryptocurrencies Continue To Drop Here’s How It Could Affect You
Cryptocurrencies have taken a beating over the past few weeks, with several of the biggest names in crypto plummeting. The price of Bitcoin is down nearly 50% since April, Ethereum has dropped by around 53% since May, and Dogecoin has plunged close to 60% over the past six weeks.
Stock market downturns are always nerve-wracking. But even the most volatile stocks don’t often fall as fast or hard as cryptocurrencies.
If you’ve invested in the crypto market, should you be worried about the most recent crash? Here’s what you need to know.
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Why Bitcoin Ether Other Crypto Prices Are Crashing
2 min read.
- El Salvador on Tuesday became the first country in the world to accept bitcoin as legal tender, despite widespread domestic skepticism and international warnings of risks for consumers
Bitcoin prices plummeted from more than $52,000 per coin, over 17% to $42,000, before recovering about half of that loss after El Salvador became the first country to adopt Bitcoin as legal tender on Tuesday. However, the rollout stumbled in its first hours and El Salvador President Nayib Bukele said the digital wallet used for transactions was not functioning.
Tuesdays selloff is the most significant break in the rebound that had lifted Bitcoin almost 75% since late July. Overall cryptocurrency market value fell about $300 billion in the past 24 hours, according to tracker CoinGecko.
The world’s largest cryptocurrency staged a small recovery as Bitcoin prices today were at around $46,757, down 11%. Meanwhile, other digital coins followed the lead with ether fell over 11% to $3,471 whereas dogecoin and cardano prices plunged 15% and 12% to $0.26 and $2.5 respectively. Stellar, XRP, Uniswap also crashed in the range of 15-20% over the last 24 hours.
According to experts, bitcoin was still in the bull market as long the price stayed above the $43,000 level.
What Is Happening To Bitcoin
Bitcoin, and those invested in it, has been on a rollercoaster ride of late, rising and falling sharply on the back of a number of news stories.
To summarise, these dramatic ups and downs over the past few months:
- 16 December 2020: Price hits $20,000 per coin for the first time
- 13 April2021: Value hits a record high of $63,375
- 22 June 2021: Falls to under $30,000 for the first time in 5 months
- 2 August2021: Bitcoin rallies to its highest level since May at $40,000
- 23 August 2021: Price returns to above the $50,000 mark
So what is happening? Well, lots.
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Elon Musk Has The Potential To Crash Crypto
Tesla CEO Elon Musks attack on Bitcoin was one of the causes of the Bitcoin crash May 19 leading to the general crypto crash.
Musk caused massive Bitcoin fear, uncertainty and doubt by berating Bitcoin for being environmentally unfriendly and insufficiently decentralised.
Elon Musk and Tesla present an ongoing threat to Bitcoin and the crypto bull market.
Although Tesla is no longer allowing customers to buy its vehicles with Bitcoin, it still has over a billion dollars in Bitcoin on its books.
If Tesla sells out of Bitcoin, that could re-start the negative cycle that contributed to the crash of May 19. A Bitcoin tumble to the $20,000 mark would likely lead to another crypto collapse all over again.
As long as Bitcoin remains at risk of sentiment-destruction by Elon Musk on Twitter, the crypto crash cannot be pronounced as over.
Once cryptos in general have enjoyed several weeks of stability and growth, it will be reasonable to suggest the crypto crash is over.
What Next After The Crypto Market Crash 2021
The recent crypto market crash had been brutal, to say the least. The $2.6 trillion market lost $1.3 trillion two weeks after the high of the market. Except for stablecoins whose values are pegged to fiat currencies, there wasnt a single cryptocurrency in the top 100 by market capitalization which did not lose value.
Lets delve deeper into what caused the market crash and what is the future of the crypto industry.
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Buckle Up For More Volatility
Cryptos price volatility is something most investors have just come to accept. If there are no periods of sharp drops of 20-50 percent over several days, there can be no periods of rapid growth of 100-200 percent over a short time as well.
There are commonly sharp movements that make crypto-assets attractive for retail investors, who tend to take high risks in pursuit of high profits.
However, if you remove the risk, crypto will become comparable to other assets such as metals or other traditional assets trading on the worlds largest exchanges.
It is up for debate whether BTC will not always be capable of such extreme volatility. For example, large drops will no longer be possible when the capitalization of BTC is so large that retail sales will not affect the exchange rate.
Looking ahead, it is anyones guess where crypto prices are headed. However, given its past performance, we could easily see BTC or other cryptos reach escape velocity at some point in the near future if risk appetite holds.
In the last 60-90 days alone there has not been a lot of positive action in the market, which could point to higher prices. With the summer months historically representing a lull for markets, it will be interesting to see how crypto behaves during this period.
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Bitcoin Faces Several Challenges
Even if Tesla and Musk disappear, Bitcoin would still face many challenges.
Fears about the impact of government regulation remain. Bitcoin could face bans in some countries. Tax rules could be brought in to blunt its investment attractiveness.
Concerns about the fact that Bitcoin uses as much electricity in a year as Poland will not go away.
So long as Bitcoin is at risk of attack from several angles, it will be vulnerable. As long as it is vulnerable, crypto as a whole will be at risk of crashing
If it faces another perfect storm of negative catalysts, as happened in the lead up to 19 May, its price can tank again once more taking the whole crypto market with it.
Why Did Cryptocurrency Crash
One of the most important factors is believed to be the possible collapse of the Evergrande Group, a property company in China that is facing a debt of $300 billion .
The crypto crash is also in-line with losses seen in the stock market, with experts believing cryptocurrencies are starting to behave more like traditional assets.
Joe DiPasquale, CEO of cryptocurrency hedge fund manager BitBull Capital, told Forbes: With the influx of institutional investors and a general overlap of market participants, weve seen the markets becoming increasingly correlated.
Moving forward we are likely to see such correlations strengthen further as the pool of market participants across traditional and crypto markets becomes more homogenous.
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Is The Crash Overblown Or Signs Of A Chief Concern
What caused the price drop in May? Ultimately a drop in demand and an over-hyped push from the outside market caused the decline in May, much as was seen in several drops during 2017 and 2018.
Put another way, there are more advanced solutions and better serving coins out there, compared to BTC as of late as well with Ethereum being a perfect example.
Ultimately, nobody really knows what the next move with BTC with the current price action having to play out with risk sentiment continuing to be a factor.
Volatility is always expected in crypto or for any new emerging technology or asset class. It is important to also pay attention to the adoption rate of the networks. For example, if the participants in the network keep growing over time, the value of the network rises.
This could be a key factor for many other cryptos moving forward in the short- and long-term.
From a monetary perspective, BTC or other cryptos are also a natural hedge against a never-before-seen expansion of US dollar money supply.
Many have seen BTC replace gold in terms of inflation hedges with institutions buying BTC at rates never higher than ever before. This could represent a tailwind that speaks to a long-term bullishness on BTC, though is too early to tell.
Obviously, a continued course or status quo by the US Federal Reserve would also need to hold steady for this trend to continue.
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What do you think about cryptocurrency? Do you have any questions about it? Be sure to leave a comment below.
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Is Another Bitcoin Crash Inevitable
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History of Bitcoin crash
- Between April 10 and 12, 2013, the cryptocurrency shed more than 80 percent of its value.
- In December 2017, the cryptocurrencys value peaked at around $20,000, and after this high, it considerably collapsed.
Will we see another Bitcoin crash?
- In September 2020, MicroStrategy acquired a total of 38,250 bitcoins valued at $425 million and subsequently announced its intentions to raise another $537.2 million to buy even more bitcoin
- In October 2020, PayPal allowed their customers to buy, sell, and hold bitcoin using their online wallets.
- In February this year, electric car manufacturer Tesla announced that they had bought $1.5 billion in Bitcoins. The company added that they are also likely to accept the cryptocurrency as payments.
- Recently, El Salvador has adopted Bitcoin as legal tender and the Argentinian President also said that he is open to the idea of treating cryptos as legal currency.
Bitcoins recent report card
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