Cryptocurrencies are quite popular today. If you will ask Jay Clayton, cryptocurrencies can be used to replace fiat currencies. And also, not only does it have the potential to replace money, it can also be used without the central banks being involved. But other than this, many are keeping cryptocurrencies in order to gain some profits from digital assets. Known for its wild price swings, you can easily triple your money in just a short period of time.
However, it is now easier said than done. It can be hard to get some profits especially now that market remained bearish.
Don’t Buy The Fear?
After the recent attack on the South Korean exchange Coinrail, Bitcoin dropped a significant amount landing below $7,000 in the process. But should you be worried if this is the case? Should you start cutting losses especially when the market lost close to $50 billion?
If you will follow the advice of John McAfee, he said that “do not panic about the drop in Bitcoin’s price. It is an overreaction to the news that Bitstamp, Coinbase, itBit, and Kraken are being investigated for price manipulation. This will delay the bull market by no more than 30 days. Don’t buy into fear. Buy the coins”.
The United States Commodity Futures Trading Commission working together with the US Justice Department demanded the likes of Bitstamp, Coinbase, Itbit, and Kraken to cooperate. These four exchanges were served with subpoenas since they have failed to provide Bitcoin data that was requested earlier in the year.
There was a suspicion that there was price manipulation responsible for the bearish trends experienced by Bitcoin. In mid-December, Bitcoin was trading at almost $20,000 only to drop suddenly. And this resulted to CFTC to intervene.
Should You Buy?
Should you buy at this point? Though it isn’t a good idea to invest your retirement on Bitcoin or any other cryptocurrency, it is a good idea to buy low if you want to follow the advice of John McAfee.
Though you have the declining popularity of Bitcoin on Google search activity which declined by 75% ever since it was able to hit its all-time high, there are possible changes that may favor another bull run.
For instance, you have the NYSE that has expressed their interest in opening Bitcoin ETF trading, You also have Nasdaq looking to open a crypto trading services. All of these things signify that there is the presence of a potential bull-run just once regulatory concerns have been ironed out.
It is true that if you entered buying during the peak of Bitcoin’s price at $19,500, you would be feeling the pain considering that it has lost 65% of its value today. However, it is true that it could be worth waiting.
Institutional investors entering the crypto market would mean big money. In addition to this, Japan has already changed its policies in order to protect investors. And for this reason, there is a possibility that this could also be applied by other regulators especially in South Korea after what happened to Coinrail losing more than $30 million-worth of digital currencies.