Bitcoin is never out of the headlines for long, either praised by the users or slammed by the critics. Cryptocurrencies have been always a source of controversy with the whole idea of open markets and free exchange. Needless to say, financial institutions are not huge fans of this kind of system that eliminates the need for paying bank fees for every transaction.
Naysayers have always blasted digital coins, especially Bitcoin, as being volatile and unreliable currency but despite all the disproval from the Wall St, cryptos managed to stay and thrive.
The question that always lingers is whether or not investing in digital monies is a good idea, and of it is – when is the right time to buy, sell, or trade? Since there is no short answer to this, we broke it down in several main points so that you can make a more informed decision.
Value fluctuations
The ebb and flow of the value is the main reason why opponents are against investing in Bitcoin, and in cryptocurrencies in general. If you invested in Bitcoin 10 years ago, congratulations – you’ll probably a millionaire now, and your investment paid thousands of times more.
However, the truth is Bitcoin can be unpredictable and there is a year’s long record to support these claims. In 2017, one Bitcoin was worth a bit more than $1000, and in one year it reached a value of almost $15,000. Evidently, 2017 was the time to invest. Nevertheless, in March of 2024, it plummeted to $4000 for 1BTC.
Some accredit this loss to a pandemic, although we can never be sure since the Bitcoin is not regulated by any government and the number of available coins is always the same. So, if this is true, what determines the price? Sorry.
It must be some sort of top-secret carefully guarded by the creators since to this day no one was able to determine with certainty why and when cryptocurrencies gain or lose in value. Today, Bitcoin is gaining again, with some prediction going over $15,000 in the next year. Those are speculations and should be taken with a grain of salt.
Is it the right time to invest in Bitcoin?
Markets around the world are unpredictable right now. The world is on the verge of recovering from the havoc the pandemic caused, and investors are very cautious. DOW dropped 5%, and S&P gained 3% this year so far, which is not very promising.
Financial institutions are printing money like stamps, trying to avoid the collapse of the economy like the one that happened in 2008, and traders prefer to watch from the sidelines to what happens at least until the next year. Inflation is the foreseeable consequence, and many are pulling out their money from the funds and calling on their loans. The stock exchange is at the seesaw for the past several months leaving investors to scramble to find new opportunities. Almost immediately they turned to cryptocurrencies, mainly Bitcoin.
There are a couple of reasons for this. First, Bitcoin has been around for a long time, and despite having ups and downs, it proved to be a secure investment overall. Secondly, open markets are not under the control of any country, meaning government rules and regulations and there is always the same number of Bitcoins available, 21 million.
Right now, the Bitcoin definitely has some more investing appeal than the traditional stocks. So, yes, it is a good time to invest in Bitcoin. Cryptocurrencies are gaining momentum again with less risk than other potential funds.
The prognosis
First, it needs to be said that no one can predict the future. However, some tried to foresee the subsequent events regarding cryptocurrencies. The vast majority of the major investors are not convinced that Bitcoin and other digital coins will succeed in the long run. Being present on the market for 10 years doesn’t mean much in the historic sense, and they mostly see it as a hype that is bound to die down in the future.
Furthermore, there is this notion that has been repeated many times that Bitcoin is “backed by thin air”, thus it has no real value. It’s true, Bitcoin is not secured by gold like traditional currencies, which is why it’s considered to be part of the free market. On the other hand, there are some investors that are overly optimistic when it comes to Bitcoin claiming that the value is going to rise up to 1 million in the next 10 years.
The truth is probably somewhere in the middle. Bitcoin will continue to rise and fall throughout its existence, like any other currency, but it’s highly unlikely that it will crash or rise to the extreme values. Listen to the experiences of some major investors like Richard Branson and Bill Gates about the value of the Bitcoin at BitcoinEvolution.
Investing and trading
A safer way to make a profit on Bitcoin is to trade. The rule is simple – buy low and sell high. If you don’t have any cryptocurrency, buy some satoshis for starters and begin trading. You’ll be able to make some profits just by keeping an eye on the market flow and selling at the right moment.
The investment is not life-changing but it can still bring some cash. There are some websites where you can search and monitor major investors and learn from them. You can even copy their moves, thus learning through practice. Once you get the hang of it try trading yourself.
Investing is a risk by definition. There is no way anyone can tell for sure whether or not it’s going to pay off. So far, the Bitcoin has proved to be a legit investment regardless of the swinging value. The upside is that there will never be any inflation and the supply is always fixed.
The only thing that could happen is the demand, which is only going to drive the price upward. If you don’t feel comfortable investing in an unregulated market, start with small and low-risk investments. This will help you learn more about the crypto world and gain self-confidence.
Kim Marks 