Investing in cryptocurrency is still risky
At this stage, it is difficult to make confident forecasts for the further trend..
Experts recommend investing only the money that can be lost.
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Against the backdrop of halving, many members of the crypto community gave positive forecasts for Bitcoin (BTC). After a long sideways movement, the coin still went up. At the moment, the digital asset approached the level of $ 12 thousand, after which it went into correction. As of 15:55 (Moscow time) on August 5, the cryptocurrency is trading at $ 11,508 (according to the resource CoinMarketCap).
Against the background of the positive movement realized by Bitcoin, many potential investors wondered if BTC has prospects for further growth. The editors of BeInCrypto decided to ask experts how attractive investments in a coin are today.
Buy bitcoin or not – what experts think
One of the first to share his point of view on the issue with BeInCrypto EXANTE analyst Viktor Argonov. In his opinion, for long-term investments, for example, for ten years, it does not matter at what point to buy bitcoin. The expert believes that despite local drawdowns, the overall dynamics promises to be positive. The key to success, in his opinion, is the regularity of purchases, albeit in small volumes..
“For short-term investments, cryptocurrencies are poorly suited, they are even more volatile than stocks. As a rule, in investments, long horizons presuppose the possibility of investing in the maximum allowable profitability, while short horizons force to shift the priority from profitability to liquidity and price stability, “Viktor Argonov explained his point of view..
At the same time, the expert drew attention to the fact that bitcoin is a very speculative asset..
“It is not for nothing that it [bitcoin] is compared to gold. As well as valuable metal, it does not produce anything and does not pay dividends. Bitcoin is worth having in the portfolio, but it is better to diversify the basket with other cryptocurrencies, such as ETH, as well as with stocks and bonds, ”concluded Viktor Argonov.
Correlation of bitcoin with gold. Data: Bloomberg
Attitude the founder of Blockchain Technology company Alexander Lavrentiev the prospects for bitcoin turned out to be less optimistic. He believes that the current value of bitcoin is artificially high.
The expert drew attention to the fact that many analysts and other members of the crypto community often give unjustifiably positive forecasts of the movement of the coin rate. As an example, the founder of Blockchain Technology cited promises of BTC growth up to $ 50 thousand, which appeared in the media amid the hype around cryptocurrencies in 2017 (in December 2017, Bitcoin reached its maximum value near the level of $ 20 thousand)..
Bitcoin chart. Data: TradingView
The coin itself, as noted by Alexander Lavrentyev, is not supported by anything. Bitcoin, in his opinion, was “grown” for the general interest.
“The coin has nothing to do with the economy and does not give anything, except for the feeling of a soap bubble supported by people involved in the system,” the expert explained..
The current growth of bitcoin, in his opinion, is short-term. Alexander Lavrentiev believes that ahead of the cryptocurrency is waiting for a “peak in the form of a red candle down”.
At the same time, the founder of Blockchain Technology still sees the prospects for investing in BTC. In his opinion, only free funds that a person is willing to lose can be invested in cryptocurrency..
“Let’s remember the investors who invested $ 19 thousand in a coin for 1 digital asset in 2017. For 2020, their losses are about 50%. If a person bought for $ 50 thousand, then his funds have now turned into $ 25 thousand, “- using this example, the expert explained the risks of investing in BTC, drawing attention to the fact that bitcoin can be manipulated.
At the same time, Alexander Lavrentyev proposed an alternative to investing in cryptocurrency. In his opinion, investing in a bank in a deposit account for a period of three years allows you to earn much more..
“Whether it is worth investing in a coin is an individual decision. In practice, this is a high-risk investment with a minimal return on investment, ”the expert summed up.
Should You BUY BITCOIN Now?
Nikolay Klenov, financial analyst at Raison Asset Management investment company, in turn, believes that long-term investment is the most effective strategy for bitcoin.
“This is a limited issue asset that will grow in value over time. An additional stimulus for demand will be that cryptocurrencies will gradually enter the economic life and legal framework of different countries. This will increase the number of private and institutional investors who want to invest in the asset, ”the expert explained his point of view.
In his opinion, the immediate goal for bitcoin is to gain a foothold above $ 12 thousand. If this happens, according to Nikolai Klenov, growth to $ 15 + thousand is quite possible.
“In the long term, however, quotes can reach $ 50 + thousand”, – with such a forecast the expert completed his answer.
Levels reflecting the growth potential of the bitcoin rate, according to Nikolai Klenov
She also shared her opinion on whether to buy bitcoin today with BeInCrypto Tatiana Maksimenko, official representative of the Garantex cryptocurrency exchange. The expert believes that bitcoin is worth buying for both $ 1,000 and $ 10,000. The main thing, in her opinion, is not to invest all the funds in BTC and to diversify your investment portfolio correctly..
Tatiana Maksimenko believes that investors do not need to reinvent the wheel: they need to follow the same simple investment rules as in other assets. For example, investing a certain amount in bitcoin regardless of its rate. Then the influence of price fluctuations on the value of the investment portfolio, in her opinion, will be smoothed over time.
“In my opinion, bitcoin is a long-term investment. It has huge growth potential in the future, but this is a 5-10 year perspective. Now the cryptocurrency can fall to $ 5 thousand more than once, and then soar again to $ 15 thousand. In the long term, it may well overcome the maximum of 2017 and exceed $ 20 thousand. This is facilitated by the market sentiment, “said Tatiana Maksimenko.
Changes in the value of bitcoin over different periods. Data: CoinDance
Investors, in her opinion, are concerned about how the rhetoric of financial regulators is changing: how they are ready to “flood the fire” caused by the pandemic with new printed money, how easily economic ties collapse under the pressure of often populist and rash political sentiments.
“Bitcoin, even with its volatility, looks more stable and safer against this background,” concluded the expert.
Most experts see the prospects for investing in bitcoin. At the same time, many emphasize that investments in BTC should be for the long term. The need for time can be explained by the growth potential of the cryptocurrency, against the background of its limited supply. To other conclusions:
- Despite the fact that there is a potential for growth before Bitcoin, it is important to remember the high risk of investing in cryptocurrency before making an investment decision. Also, the user should be prepared for the fact that it can take a long time to profit from BTC..
- It is not known when exactly bitcoin will go into active growth. It is important to remember that all expert forecasts are nothing more than mere assumptions. Even the most experienced members of the crypto community make mistakes in their predictions. For example, at the end of August 2018, the creator of a cryptocurrency from the top ten of the capitalization rating – Litecoin – Charlie Lee said that BTC will return to its maximum value (near the $ 20 thousand level) in six months. It’s August 2020, and Bitcoin is still far from the record price.
- You shouldn’t invest your last money in bitcoin. Many experts advise to invest in cryptocurrency only those funds that they can lose. It is also important not to forget about portfolio diversification..
For those who do not want to stop at one bitcoin, the BeInCrypto editorial staff has prepared a material on the top 5 cryptocurrencies for investment in 2020.
Tesla & Elon Musk Buy Bitcoin – This Changes EVERYTHING
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