Folks who have been in the cryptocurrency game for a while might be used to this type of stuff by now.
Crashes of 50% are not unheard of in the world of crypto. You cannot expect these digital assets to act like blue-chip stocks. They are not something to rely on for an upcoming retirement for example.
If you can deal with the volatility, though, then the upside possibility is powerful. Keeping Bitcoin through the pullbacks has, so far, been a profitable strategy in the long-run.
Still, your resolve and patience might be tested time and again.
That is why it’s worthwhile to re-think your crypto holdings and decide what motivates you to keep your position.
Looking at the Bitcoin Price
Bitcoin began 2021 just under $30,000, but investors were soon to go through a roller-coaster ride.
The Bitcoin price lowered, but then suddenly spiked towards $60,000 in Feb. Then we saw more value volatility and another shakeout, followed by yet another huge rally.
Bitcoin then topped at $64,863.10 in April. At that time, the price was actually double its ytd number.
I have said it before, and here it is again. If you chase after vertical moves, you might get severely hurt.
People who buy Bitcoin over $60,000 might have regretted it as the price went down during the next few months.
In July, BTC briefly went under $30,000 but then came back to hit $34,000. This might represent a great discount or a dangerous knife, depending upon which perspective you have.
My point is that investing when others are capitulating is a good strategy to have.
The Bitcoin price will move around a lot. That is how it goes in this world of crypto, as volatility is to be anticipated.
It is up to the investor to decide if the price pullbacks are good opportunities to buy or not.
But looking at Bitcoin’s history of downfalls and comebacks – and in light of Elon Musk’s current attitude to Bitcoin – a return to $60,000 looks to be in the works.
Author: Blake Ambrose