Bitcoin has become a buzzword over recent years, and savvy and experienced investors have been closely following its progress in a bid to leverage this leading decentralised asset in the hopes of making some sizable profits over the long term.
But it’s not just seasoned investors who have noticed the potential where Bitcoin and other cryptocurrencies are concerned. Eager to ride the crypto wave, young millennial amateurs, too, have made up a sizable percentage of those clamouring to stake their claim over the past decade, taking the leap in a bid to make a long-term profit. As a result, the numbers of those using crypto exchanges and trading platforms have surged, and today, are at an all-time high.
The cryptocurrency market, despite its volatility, has proved to be remarkably resilient, with prices of Bitcoin, Ether and the like rallying to all–time highs at the height of the global pandemic, when the stocks and shares market, on the other hand, was floundering. With this in mind, it’s perhaps little wonder that even the original crypto-sceptics are slowly but surely beginning to come around.
Nevertheless, we’ve seen some of the most worrying fluctuations in the crypto space just recently, with Bitcoin crashing to less than 50 per cent of its 2021 value back in May. While some investors remained unflustered, others were hurrying to sell off their assets and cut their losses. So which of them had the right idea?
Those who were prepared to hold their nerve, it seems, may be about to reap the benefits, as for the first time since June, Bitcoin has managed to maintain its price near $22,000 this week. Having settled above the $21,500 resistance zone, a gradual increase saw it move past the $22,800 mark – and although there has been a small retreat since then, investors and traders remain optimistic.
In fact, those who sold off their Bitcoin assets en masse were likely new to the investment game, as long-term professionals know all too well that the crypto market has proven its ability to bounce back rather dramatically several times in the past. In fact, it was exactly these investors who were making the opposite moves and buying as much Bitcoin as they could while prices were at their lowest – and their actions could soon be about to pay off.
“It’s been a tricky few months for the cryptocurrency market which, like all risk assets including stocks, have been hit by a wave of gloomy investor sentiment based on economic slowdown fears, inflation and geopolitical factors,” explained crypto advocate and CEO of independent financial advisory and fintech giant DeVere, Nigel Green.
“Crypto isn’t out of the woods just yet, with maybe a small and final rinse-out on its way before a considerable price bounce towards the end of the year.”
According to Green, any potential for bad news has already been priced into the risk assets market.
“This means that investor sentiment and, therefore, the price should not be rocked.
“People are starting to realise that, clearly, headwinds remain for economies around the world, but that some quality assets, like Bitcoin, are currently cheap,” he said.
Back on the bounce
“Confidence is creeping back into all markets. On Bitcoin, people are appreciating the inherent current and future value of digital, borderless, global currencies, and will start moving now to take advantage of the current lower valuations.”
Green is one of a growing number of industry experts who are predicting that a bull run will lead to a ‘significant bounce’ for Bitcoin in the final quarter of the year.
“One good indicator that the bottom is near is that tracking services reveal that ‘insiders’ are on a buying spree. They’re taking advantage of reasonable valuations to top-up stakes in quality companies in order to create and grow wealth in the longer term,” he explained.
As the leading and largest cryptocurrency in the world by market share, the influence of Bitcoin’s performance is far reaching, and as it continues to make gains, the likes of Ethereum and other alt-coins have followed suit.
“As the sugar-rush of free money fades away, we can see the real value of assets,” says Green.
“And despite coming down 50 per cent from its hype and heat-fuelled November high, Bitcoin remains the best-performing asset class of the decade.
“We expect a less high-octane, more steady, continued upward trajectory for Bitcoin over the next few months.”
Disclaimer: Investing money carries risk, do so at your own risk and we advise people to never invest more money than they can afford to lose and to seek professional advice before doing so.
