There is something called bitcoin dominance. This means Bitcoin in one way or another other has a say in the direction of cryptocurrency market trends. Thereby, advisable analyze Bitcoin before taking any other trading decision. Hence, people are so concerned leading them to ask numerous questions about Bitcoin like “When should I invest in Bitcoin “.
Meanwhile, Bitcoin experienced a very bullish moment in 2021 hitting an all-time high of $69,000. However, the following year went south as the market turned downwards into a strong bear trend. Investors tried making moves in the $18,000 range but now it is even below $16,000. There exist extreme fear in the market as disclosed by the fear and greed index. Everyone has become confused about when to invest in Bitcoin or any other cryptocurrency to avoid losses.
Well, if care to know, the storm will soon become over. But if you want to get the question of when should you invest in Bitcoin, then endeavor to carefully read through this page.
When Should I Invest In Bitcoin?
If you want to learn when you should invest in Bitcoin, then follow up carefully. We found a correlation between Bitcoin and NASDAQ in 2021 NASDAQ and Bitcoin followed a correlation reaching highs of almost 80% plus. Therefore where NASDAQ went Bitcoin often follows.
As of November 2022, the NASDAQ has fallen in a 30% drawdown. While a repetition of the 2000-style drawdown would compel NASDAQ to fall to around 3,500. So now, the question, where would crypto be if NASDAQ were trading at this level?
After the estimation of regression between bitcoin/Ethereum returns and NASDAQ returns from 2020 onwards. We got a relationship saying;
However, what the crypto market experiences now is required for a market to gain full efficiency. The impulsive bullish momentum of 2021 left lots of inefficiency in the market. Additionally, always remember to invest wisely.
Why Has Bitcoin Dropped?
If you still wonder why the crypto market and many digital markets experiences a downtrend now, then one may say it is due to the rising inflation and interest rate. However, they exist other reasons fueling the bearish moments and we’ve highlighted them below.
Should I Invest In Bitcoin?
Yes, you can invest in Bitcoin. However, bear in mind its extreme volatility and its level of risk. Therefore, avoid investing all of your savings in cryptocurrency.
Furthermore, if you have decided to take the risk, ensure to best crypto investing strategies to employ. Also, ensure you do not invest because of the fear of missing out. You have to DYOR and ask several questions before you start. Some of the questions include:
Can You Lose All Your Money In Bitcoin?
Yes, you can certainly lose your money in Bitcoin. Crypto is extremely risky and unlike traditional investment in the stock market. You can lose all money in Bitcoin in three main ways, they include;
Meanwhile, if you want to bat secure your bitcoin I any other crypto assets you have, you can store it in a hardware wallet. This helps you store your crypto offline in a physical device called a cold wallet. This seems to a computer hardware storage device. However, try to keep your key phrase to the wallet intact. This is because if misplaced it cannot be recovered.
Frequently Asked Questions About When I Should Invest In Bitcoin
How much should I first invest in Bitcoin?
Depending on your pocket size, we recommend you start small. Meanwhile, the President of All Reverse Mortgage Cliff Auerswald recommends investing $10 per week.
Is Bitcoin a good investment 2023?
Bitcoin will not go back up in 2022, as increasing interest rates and the FTX wreck have both led to a ‘risk-off’ sentiment towards crypto. However, this may change in 2023 if the economic climates become more suitable.
Will crypto crash again?
The crypto market is experiencing a strong decline currently and will crash again in the future if the economic condition demands it crashes.
Conclusion
Cryptocurrency and Bitcoin can either turn out as a good or a terrible investment. Bear in mind that the market is very volatile I have a promising profit level so as a high-risk level.
In anything, you do in the crypto space always invest wisely. Don’t invest what you can’t afford to lose. While you still try to learn when you should invest in bitcoin.