Do you HODL at this point or do you simply cut your losses? This is the question that a lot of cryptocurrency investors have in mind. To give you an idea of what just happened, right after another cryptocurrency exchange has been hacked, it wasn’t looking good for Bitcoin and other altcoins. Overnight, the total market cap for the entire crypto market dropped by more than $25 billion.
Bitcoin was trading at around $20,000 at one point in December. However, the next six months were rough for the digital currency. And it can be demoralizing for a lot of investors especially those who entered the market during the high.
Going Down to $5,000?
You may say that there are a number of factors to blame. However, we may not have seen the worst of it yet. If you are going to ask Ran Neu-Ner the host of CNBC Africa Trader, he thinks that we haven’t reached the lowest point yet. He mentioned that “We keep going down and we’re testing new lows. Sixty-two-fifty is the next point. If it goes under that, we’re going to test 5,900”.
However, he added that for miners, they should be looking at $5,000. At this point, miners should already be asking themselves if it is still profitable or not. He mentioned that if it hits this level, expect a “very different game in mining”. It wasn’t actually the first time that this was raised. These are thoughts that have already been raised by Tom Lee who is the co-founder of Fundstrat Global Advisors. He questioned the practicality of mining Bitcoin if it is simply trading around $8,000.
Miners have to deal with different factors from expensive hardware to high electricity cost. In fact, there are even places that banned mining. And though there are places like Quebec that welcomes miners, they can still expect a different rate.
In Its Infancy
If there is a silver lining that you want to hear, Neu-Ner explained that the crypto market is currently in its infancy and these kinds of things can be expected. Though he predicts that it is going to go lower, he believes that there is a possibility that the market could reach $20 trillion one day.
And for this reason, he also believes that it is actually a good time to buy. This is especially true if you are a long-term investor in cryptos. He said that “it could go 20, 30, 40 or 50,0000. then no one cares whether you bought it at 5 or 6”.
There are other experts with an optimistic view of cryptos today. It can be because of regulatory clarity slowly making progress and businesses such as Coinbase now looking to work with regulators.
Though Bitcoin failed to rebound after quite a drop, it is important to note that it could be an opportunity to acquire Bitcoin for a cheap price. It could be happening any time soon that institutional investors could get involved.
But of course, no one knows exactly when the price is going to go up again considering all the issues surrounding cryptocurrencies.