DeutschTo say it in advance: We do not want to formulate a clear buy recommendation or warning at this point. The current situation on the cryptocurrency market is too ambiguous for that. The coronavirus is a topic that has also caused some concern among Bitcoin investors and price losses for various altcoins as well as the market leader itself. A general question that arises here is whether the current developments are a temporary or long-term change. It can be helpful to consult the opinions of some experts in the crypto world to get an impression of possible pros and cons. Wait or buy? Bitcoin investors are currently facing a relatively unusual situation. We try to shed some light on the darkness.
Buying Can be Worthwhile with the Right Strategy
The fact that experts are increasingly assuming a global recession is also affecting Bitcoin. By the second weekend in March, the leading currency of the crypto market is once again continuing its downward trend significantly. At times, it even broke through the psychologically important threshold of $4,000 downwards. In percentage terms, the minus at times even amounted to around 34%. Currently, there is a correlation with the global stock market, with countless investors acting according to the motto “only cash is king”. For Timo Emden, a blockchain expert certified by the Frankfurt School of Finance & Management, it is primarily the real crypto hardliners who are keeping the market on track. Impending total losses could lead to further slumps and sell-offs in the coming weeks. Anyone who generally speculates according to the “Buy and hold” strategy will probably want to sit out the phase as usual.
Wait or Buy? The Personal Investment Criteria are Decisive
The so-called “Cost Average Effect” can also speak for further purchases these days – here, the constant stock increases are known to compensate for the fact that you do not have to be prepared for massive losses even if the price falls further in the case of long-term investments due to the average prices. Of course, this presupposes that investors had Bitcoin in their portfolio years ago, when the price was still much lower. The pressing question is: How strong are my nerves to survive the crisis? In addition, there is of course the consideration based on the investment period and the price at which Bitcoins were bought at an earlier point in time. Anyone who has been in possession of their wallet stock for a long time or has made purchases gradually can still lean back in a relaxed manner.
With healthy mixed calculations, the current low for the year does not necessarily call for decisions. However, the consideration of a possible purchase is currently much more pressing than considerations about possible sales.
Tom Lee Expects Hefty Profits in 2020
Tom Lee, one of the co-founders of the research service provider Fundstrat Global Advisors, formulated one of his analyses on the price of Bitcoin (BTC), which is in demand within the community, again at the end of February. Even at this time, the market was under pressure – also because of the first stock market concerns in connection with the spread of the Corona virus. Lee is an advocate of the buy-and-hold” strategy and the conviction that there are only ten days a year for lucrative Bitcoin transactions anyway. Outside of this window, investors should sit back and wait. So far, Lee has been expecting a BTC price of 25,000 US dollars by the year 2022. Accordingly, some interested parties will be surprised by Lee’s latest statement.
At the end of February, he was optimistic that the price could crack the 30,000 USD mark as early as 2020 with a bit of luck. Although the virus was already on everyone’s lips at the end of February, the effects were not as serious as at the end of the second week of March, which is why not every analyst will share the positive assessment of buying or waiting around Bitcoin.
Nevertheless:
There are several voices that are currently advising a purchase. Price analyses also speak for a preliminary end to the historical slump. Just in time for Friday the 13th, the price was able to leave the short-term low just above 4,000 US dollars behind and climbed to over 5,500 USD (source: coinmarketcap). Possibly only temporarily, but at least it is a recovery after the dramatic course.
Antonopoulos also Sees the Crypto Sector under Pressure
One of the declared experts who would probably advise against buying and possibly also waiting in favor of selling to avoid worse losses is Andreas Antonopoulos. He recently expressed doubts about the position held by some analysts that Bitcoin could benefit on a large scale from a global economic crisis. There were several opinions of this kind that hoped for the final crypto breakthrough from the recessive mood. Not so Antonopoulos. He does not think much of the hope that Bitcoin could become a safe haven in the crisis, as is traditionally the case with the precious metal gold. Antonopoulos rather expects that declining investments in the technology sector could also fall back on cryptocurrencies and the blockchain industry. One reason he sees is the lack of mass suitability of Bitcoin and Co.
Precise Assessments Remain a Hot Topic
How far analysts with their assessments of the BTC price and thus a reliable answer to the question asked at the beginning about buying or waiting could be from the truth was recently shown by the Austrian platform Förderportal.at. The experts came to the conclusion that the vast majority of the analyses ran into the void. Only a few opinions have proven true in recent months. In particular, the effects of political conflicts are hardly calculable from the perspective of the crypto sector. A look at the upcoming developments in the Bitcoin universe, however, fuels the hope that the current cleanup could hold opportunities for an early purchase.
Will the Next Halving Lead Back into Five-Digit Price Spheres?
Via Twitter, crypto analyst Polar Hunt informed his followers that there could be a rapid price increase in the weeks before the halving, which is expected to take place in May 2020. He refers to chart analytical data from the environment of the last halving in early summer 2016. Compared to then, Bitcoin is presenting itself well. Against the background of the historical price data, Hunt considers a price of up to 18,000 US dollars by May of this year to be by no means excluded.
Can I Afford Interim Losses?
What do we learn from these sometimes very contradictory pro and contra analyses? Well, first and foremost, the opposing assessments make it clear that the young market is still quite unpredictable in many areas. Especially in economic crises, there is a lack of empirical data. In the end, it remains primarily an individual question, which also and especially depends on the financial resources and the investment horizon. Can I afford it for the time being if the price temporarily gives way again due to the crisis? How quickly do I need invested capital again for other purposes? Anyone who waits for the return to old price levels after a purchase and can sit out a temporary minus could currently take advantage of comparatively favorable prices. According to some crypto experts, this applies not least to investors who appreciate digital currencies for mixing their portfolio.
Here, gains could cushion continued losses in other asset classes at the latest after the halving. Because the stock markets have difficult months ahead of them. The fact that the crypto market is currently experiencing its presumably worst slump in around seven years will unsettle some investors. Pioneers like Cardano boss Charles Hoskinson are therefore warning against the outbreak of a veritable hysteria for good reason.
