With ferocious market volatility and huge drops in price, the time to buy crypto has never been so inviting.
This article is not intended to downplay the damage that the coronavirus has caused to our families, our jobs, or indeed to our society as a whole. The devastation this pathogen has brought to our lives continues to put strain on our emotions, our income and the stability of our local and global economies.
Now that the serious stuff is out of the way, let’s focus on how cryptocurrency can be the silver lining in this terrible situation.
The events of 2020 that have already come to pass have had a huge impact on cryptocurrency; none more than the outbreak of COVID-19. Here, we will present 3 key factors that reveal this to be a very interesting and exciting time for first-time investors.
#1 The Price Drop
The low prices of cryptocurrencies at the moment creates an opportunity for those who are just beginning their journey into investment. While it is true that the sudden plummet of Bitcoin and all crypto was a deep concern for those who have millions already invested, if you are looking to buy cryptocurrency for the first time, these tokens may now be priced within your budget.
Contrary to the beliefs of many, this crisis will pass in time, and when it does, the markets will recover. This means that 2020 has been incredibly kind to crypto buyers. The bounce back of these digital assets is likely to be dramatic, and investors could see the value of their portfolio multiply many times overnight.
Today, March 23rd, 2020, Bitcoin is trading at around $5,800 and some experts expect it to drop even further over the coming weeks. But there will be a point where this downtrend switches direction. When this happens, it will be an exciting time for long-term holders and short-term traders alike. For those invested in the long game, the most enthusiastic crypto investors eagerly await Bitcoin to hit its $20,000 mark again. If the price of Bitcoin dips to as low as $4,000 during this time, but eventually surpasses it’s previous all-time high, you would receive more than 5 times your initial investment. The time to buy may be now.
#2 The Incredible Volatility of Crypto
What makes cryptocurrency such an exciting addition to any investor’s portfolio, is its volatility. Never have the markets included a trading instrument that experiences such rapid price fluctuations as these digital assets.
Cryptocurrency is not a physical thing, and so many factors influence their price considerably. Market sentiment, which is the psychological and emotional drive behind investment decisions, is a most important consideration when it comes to crypto. It is a kind of ‘crowd’ mentality that has the potential to drive prices radically in a very short space of time.
Volatility is especially useful for short-term, or ‘intraday’ trading. It enables an investor to buy into a trade at a low price and see a significant rise in value by the end of the day when their trading positions are closed. Many people have already built very successful careers off of this strategy.
You must exercise great care, however. High volatility means greater risk, and if you are not properly prepared, there is just as much potential for losses as there are for gains.
Respected and reputable brokers and exchange platforms allow users to set their risk management limits before committing any real money, and this is an absolutely essential practice. If you are unfamiliar with risk management, it is vitally important that you do a little research to fully understand the mechanisms before entering into any CFD trade.
We want you to be able to capitalise on an opportunity here, not place yourself into any financial danger. So please, use what time you have to do the research and learn the game a little. The more knowledge that you have, the better your position to make these days at home, lucrative ones. Never invest any amount that you can’t afford to lose.
#3 The Bitcoin Halvening
The expected halvening for Bitcoin approaches. This is an event that takes place every 210,000 blocks, where the reward given to miners is halved: this time from 12.5 coins to 6 .25.
After the halvening, the amount of new coins being brought into circulation decreases which in turn, increases the demand.
As the cost of production exceeded the value of the coin recently, some companies involved in mining have pointed out that it made more economic sense for miners to purchase coins than to create them. The May halvening would basically double the cost of mining Bitcoin overnight, which in the current climate, could have serious repercussions on the security of the network.
However, as was reported in a recent article, if miners begin to switch off their rigs (ASICs), the difficulty of mining new blocks would also decrease. Demand for buying would increase as production became cheaper; So, Bitcoin’s value would sustain itself by its very design.
If the halvening effects the price of Bitcoin as was expected at the start of the year, then we are on the precipice of an event that will have a great impact on the price of Bitcoin, and the window is closing fast.
There are many trading experts who feel that the crypto sphere is now in a buyers’ market, and the factors that have created it will hopefully, not come to pass again.
Crypto can be very exciting and profitable, but it should be done responsibly. If you are one of the many individuals doing their bit to prevent further spread of the coronavirus by staying at home, your finances needn’t grow stagnant.
But this is also a time where we must all take great care of ourselves and one another. If you feel you would like to get involved in cryptocurrency, please do your research to avoid causing yourself any undue hardship.
This article exists only to inform you. Stay safe and stay healthy.