In recent months, it has been news in the investment world that Bitcoin has moved far from its all-time highs achieved at the beginning of the year, and has been reduced to a third of its value in these months. But for various reasons, Bitcoin is still alive and kicking, and you can still trade with it.
In fact, today it is easier than ever to invest in Bitcoin, thanks to its lower prices, well below the $30.000 threshold that was once said to be the minimum limit. Bitcoin, like any other currency, remains an investment asset both at a high level and at home. The latter is thanks to the fact that there are more and more personalized investment options like Bitcoin Prime, which compete fiercely to attract users by applying more and more innovations to cryptocurrency trading and investment.
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What has happened for Bitcoin to drop so low?
It is difficult to say what has happened, since the volatility of cryptocurrencies makes them a risky investment asset, not so much a payment currency for daily use. The latter is something that has been implemented in some countries, but many other central banks criticize that it is so volatile that it is used to collect payroll, buy food for the week and pay bills. But it still has a value for those who trust it.
Interest rates, the price of electricity, the high influx of people without detailed knowledge of its management... These are things that as a whole have affected the price of Bitcoin. But as it has been seen according to the valuation in several exchanges, after falling below $20.000, its value has begun to rise, albeit at a more leisurely pace. A more stable revaluation is in sight, with some falls in the short term, but a large revaluation is possible in the medium term.
Bitcoin, an investment in the future
Perhaps right now the best way to invest in Bitcoin is not expecting that within a month you will recover your investment by 10%. Very surely these revaluations will not happen so fast, at least for several months. As an investment asset, it seems to have stabilized, so it is possible to play in the medium or long term, that is, invest an amount that you are willing not to have for at least a year waiting for the asset to appreciate, or even five, in order to optimize the investment. For a large company that manages investments, it may be temporary, but for a small investor, five years seems like a long time and the expected time may not compensate for the return on investment.
But the five-year cycle is not far-fetched, as many people who claim to have made a fortune in cryptocurrencies did so by investing that many years ago, when their value was very low. The mythical “hodl", which is to save your investment until a peak of the price compared to the initial cost. They are not really investment geniuses, they are people who could afford to wait to withdraw their investment after five years or more, because any investment for so long is considered by many to be a genius, but in reality it is a mixture of a lot of luck and patience.
It never hurts to remember not to play with money you can't afford to lose.
Every time we have to write tips and ideas to invest, be it forex or cryptocurrencies or any other branch of investments, we say the following: the golden rule of investments is that Never invest money that you cannot afford to lose.. It is the first thing you should know and you should take it into account.
Why? Because if you invest an extra summer pay, it may happen that the value of what you put in falls by half, and in commissions they take even more and you keep a third of what you earned, and all this in two days. Would you play the money from a subsidy to put solar panels in your house that has been granted to you before the installation to some roulette games? Investments have their enormous share of chance, and if large investors can do so much it is because they have funds, many active people and many assets and liabilities that allow them to operate on such a scale.
All money that enters the cryptoactive exchange system you can give it up for lost because nothing guarantees that you will recover it. There is no insurance or anything that will return the money invested if it all results in a withdrawal from the market. There are no contingency plans or state compensation for scams.
Every investment is a risk and a bet. Be it short or long, it is money that you will not have available unless the investment turns out favorable or at least it does not mean that you lose everything. Therefore, those who gain the most are the ones who can afford to lose the most. If you are an individual, you do not have as much margin of loss as an investment fund.
Bitcoin is volatile, take advantage of it and be careful
Bitcoin is a crypto asset and is not regulated by almost any country as it is a decentralized cryptocurrency. China has banned all cryptocurrency for the uses that can be given to it for fraud. This includes its mining activities, with which this implies a depreciation of the price due to the loss of confidence by not operating in one of the key countries of the current economy.
El Salvador and the Central African Republic they accepted it as legal tender, but this did not imply any change for the better for his valuation. This is because the impact of these two countries considering it currency is minimal, and it was done as an alternative to the local currency and not depend on foreign currencies, as in the case of El Salvador.
There is nothing physical that supports the value of Bitcoin due to its nature of being decentralized and not dependent on central banks. It is a risk because it can be valued quickly, but at the same time it is expected to lose a lot of value due to uncertainties about its viability in the future.
For example, there are movements limiting mining and therefore blockchains based on the proof of work mining protocol, of which Bitcoin boasts, but for its electricity consumption. A large country regulating against this type of crypto mining can quickly and forcefully affect the value of Bitcoin. Switzerland has proposed to do it at a national level, and with the rising costs of energy, it would not be strange that in a few years it would go to Proof of Stake, for which whoever has invested in Bitcoin before will benefit more than those who enter later.
This is why monitoring and automated trading software is on the rise, as allows you to have alerts on your mobile phone in the face of legal decisions as well, and falls in value, or revaluations.
