In 2022, with everything so uncertain now in terms of inflation, investment, and other monetary issues, one would think that now would be the right time to buy into the world’s most popular cryptocurrency, Bitcoin. Bitcoin holds a lot of attractive value to investors: a decentralized currency that often holds its value far better than other risky investments.
Last year, in November of 2021, Bitcoin had reached its all-time high of almost $69k after rebounding from a devastating drop to nearly half that amount of $33k in January of the same year. At the time of writing, Bitcoin is now steady at around $38k. So what’s the issue? Why does such a valuable currency seem to be dropping steadily from its heyday?
We are going to take a look at why Bitcoin is dropping and what that means for your portfolio if you invested in this stock. Additionally, it will enlighten you about whether you should or should not invest in this stock when it is low and if it will go back up again. So let’s get right to it.
What is Bitcoin?
Bitcoin is a digital currency. The idea behind Bitcoin is that it operates independently of central banks, governments, and other currencies — though you’ll see later in the article why that isn’t quite the case.
Bitcoin was created in 2009 as an alternative to the currency we’ve always known, which is often at the whims of the market, economy, and global position. Instead, Bitcoin relies on something called cryptography and peer-to-peer software. Each Bitcoin is “mined” through a very complicated mathematics code and then kept on a public ledger.
These days, Bitcoin and other cryptocurrencies have skyrocketed in price and popularity. Just like any other asset, Bitcoin has the ability to be converted into cash. Unlike other assets, however, like cash or gold, Bitcoin doesn’t have an inherent value. Its value is entirely decided by the market.
What was once a niche currency used by internet cowboys in the early days of Web2, cryptocurrency now has major investors all over the world. While regular people still invest in crypto, investors with large capital have seen the benefits of a decentralized currency.
Bitcoin is high risk
As is a lot of cryptos, Bitcoin is often seen as a speculative and risky investment. When an investment is considered risky, it’s because the investment itself can experience a lot of ups and downs in terms of price, and a high return isn’t guaranteed. Under pretty much any market condition— good, bad, or steady —you can pretty much expect any risky investment to move up and down in price. The same thing goes for other risky assets, like any kind of currency or stock.
In order to stick with such a high-risk investment, you need to have a little know-how. Bitcoin has skyrocketed to 70% at times and tanked close to only 30% of its value. If you’re new to crypto, then you need to be able to withstand the highs and lows of this particularly volatile market.
Knowing what the investors are doing, especially with such a high-risk asset like Bitcoin, is one of the best ways to keep your reward high. With a membership program like Capitalist Exploits Insider, you’ll have all the access that you could possibly want to hedge fund managers that will guide you on how to grow your wealth— even through Bitcoin.
Capitalist Exploits Insider is perfect for investors with all kinds of experience, whether you’re brand new to investing altogether or if you’re just new to Bitcoin. These money managers will be able to guide you into growing your generational wealth, even if you’ve got very little capital to start.
So why is Bitcoin dropping?
Bitcoin has shown to be somewhat connected with broad market fluctuations. This means that Bitcoin isn’t as hands-off as crypto enthusiasts might originally purport. The draw of cryptocurrency like Bitcoin is that it keeps its staying power and that it’s independent of any central bank, but that doesn’t seem to be the case.
This is entirely normal with any other risk asset, and for something like Bitcoin, with human investors, buyers, and sellers, then it’s going to be part of the same up and down of every other risk investment. And in particular, this isn’t a new situation. Bitcoin has had its ups and downs since its invention in 2009, and 50% drops aren’t particularly alarming.
The investor experts don’t seem concerned when it comes to Bitcoin dropping. In fact, many investors say that anyone who spooks at the first sign of a decline in Bitcoin should probably avoid buying into it. It takes a lot of nerve to ride through the lows so that you can get to eventual highs.
Capitalist Exploits has a newsletter called Insider Weekly that gives you access to all the up-to-date information on what investors are doing. This can be a lifesaver when it comes to monitoring your crypto investments. Insider Weekly offers professional investor ideas that will allow you to get the most out of your investment— and you’ll be doing it alongside some of the greatest minds in money management.
Some of the best advice we can offer when it comes to Bitcoin dropping is the following:
- Take a look at Bitcoin’s overall performance, both for the month or year, and make your decision based on that.
- Don’t get caught up in watching every movement of Bitcoin’s performance.
- Keep a steady head. You’ll need it for the rollercoaster that can be owning Bitcoin. It has ups and downs, and always will, so stay calm when it moves.
Be in the know: understand your investment
Whether or not you should invest in Bitcoin relies on a number of factors. First, it relies on how much you’re willing to risk and how much you’re willing to lose. Just like other risky investments, there’s never a complete guarantee on your return. If you’re willing to hold Bitcoin for the long haul to see that spike in price again, then you might be ready to invest.
More and more, Bitcoin has become more accessible to your everyday investors, especially those new to the game of investments. You can even buy Bitcoin out of a kiosk at the mall. And despite the fast falls that can send other investors running for the hills, the growth rate of Bitcoin has been otherwise extremely impressive.
However, investing in Bitcoin now could lead to a huge return. Knowing your risks is an important strategy. An even more important strategy is knowing exactly what hedge fund managers are doing regarding Bitcoin and other fast-growing cryptocurrencies. Hedgies Uncut is a membership program that allows you to be a “fly on the wall” when it comes to hedge fund managers and their raw and uncensored conversations about the market.
You’ll be surprised how much knowledge you can get when the conversation is taken out of the public eye. Hedgies Uncut shows you a deep dive into the thoughts and crypto investment practices of some of the best money managers in the world— especially when it comes to cryptocurrency.
Other cryptocurrencies
There has been an explosion of other cryptocurrencies following Bitcoin’s success. From joke currencies that have little value, like Dogecoin (at around 16 cents), to currencies that have found their own niche market in NFTs (non-fungible tokens), like Ethereum.
Currencies like Ethereum have been created as an alternative to national currencies, allowing people from any country and background to access Ether and use it for buying, selling, and trading. Currently, Ether’s popularity has exploded due to the NTF market.
Another cryptocurrency called Litecoin was one of the first to follow after Bitcoin. While many people consider Bitcoin the “gold standard” of cryptocurrency, others consider Litecoin the “silver”. It’s based on an open-source payment network that works much faster than Bitcoin, which means it doesn’t take as much time to decode on the blockchain.
Final Thoughts
All in all, Bitcoin is dropping because, while the goal is to be un-influenced by global markets, it is still influenced by human beings who are influenced by markets. However, Bitcoin dropping isn’t a bad sign, as communicated by some of the top investors. In fact, Bitcoin dropping is just a natural part of its market cycle, and you’ll often find that Bitcoin can rocket and drop over the course of a year.
In order to invest in Bitcoin, or any other cryptocurrency, you need to have the bravery to do so and an understanding of the risks. Like other high-risk assets, Bitcoin has the chance of rising and falling. Take a step back and look at the trends over the course of the entire year, rather than just a few days or weeks. This will give you a better understanding of the crypto market trends.
And finally, you can keep up with all of the best information regarding Bitcoin, cryptocurrencies, and other investment strategies by staying up to date with the Capitalist Exploits blog, with information on everything from pharmaceuticals to energy sources.