Is Cryptocurrency on the Brink of a Bounce Back?
China closing their makeshift Coronavirus hospitals could indicate an exciting opportunity for investors.
Wuhan closed its last temporary Coronavirus hospital yesterday due to a dramatic drop in the rate of new infections. Having hope on the horizon in the city where COVID-19 first began could signify the beginning of the end of this terrible contagion that has incited so much fear and panic across the globe.
The psychological impact of the Coronavirus has delivered huge blows to many cryptocurrencies last week, but if these coins were to bounce back as the virus becomes contained, we may now have a brief window of opportunity to buy crypto at historically low prices.
There is no way of knowing exactly when the markets will hit bottom, so we have to carefully hedge our bets. The director of research at Ritholtz Wealth Management, Michael Batnick stated,
“Our brains do not respond well to panic, and we will not be able to make rational decisions when everyone else is freaking out. We need to have a plan”
So, is it a good time to buy crypto?
Well, the figures certainly indicate that the recovery in China is well underway, and countries throughout Europe have been putting forth strategies to mitigate the virus for the last month or so. We can expect our own statistics to reflect a degree of control over the spread of Coronavirus in the very near future, and the financial markets are likely to recover quickly.
The key is to see the bigger picture and place your investments accordingly. Joining with public hysteria will never have positive consequences.
The mass sell-off that recently occurred was clearly a result of panic, but it actually makes little sense to convert an entire crypto portfolio into fiat currency. This would mean that you have a lot less money in 5 years’ time due to inflation alone. The wiser action would be to sell off an amount that would cover immediate expenses and leave the rest invested so that it can appreciate when the market recovers.
For the biggest players that have seen millions, or even billions of dollars vaporized through this global event, it is a worrying time for sure. But new investors have the benefit of entering a marketplace where the prices are low, without having incurred any previous losses.
For those individuals, this initial investment could provide truly massive ROI. However, they must brace themselves for the very real possibility that there will be further drops before the gains. Anyone buying now ought to have a plan to play the long game.