The two most popular cryptocurrencies are sliding. They have experienced a rough beginning of 2022. Bitcoin and Ethereum may be now considered risky assets for people to invest in.
Bitcoin has gone down 6% on Monday, making its market cap stand below $40,000 per coin. This is the first time since September the market cap has gone to $40,000. On the same note, Ethereum dropped 7% in value, going below $30,000.
The CEO of Onramp Invest, Tyrone Ross said that these dips experienced by financial assets often get investors to reconsider and review their financial plan. They can decide to invest in the volatile asset, of course if it is the right decision for them. In Tyrone’s words, “When something goes on sale, and you like it, you should buy it.”
The 10,000 Prediction:
The fact that cryptocurrencies are sliding doesn’t minimize its potential. Many investors believe that although Bitcoin had a rough start this year, it is destined for good. Antoni Trenchev, the co-founder and partner of the crypto platform Nexeo, told CNBC’s “Street Signs Asia” that he believes bitcoin can reach $100,000 by the middle of the year. Matt Hougan, the chief investment officer of Bitwise Asset Management, mentioned in an interview with Bloomberg TV that the $100,00 mark could be reached in 2022.
In November of this past year, Bitcoin reached a high of nearly $69,000 but since then has stooped low and eventually increased roughly 40% throughout the year.
In addition to the highs and lows bitcoin experienced, it has become very acceptable to use this asset as a form of payment. Ross believes that although most people have not adapted to this new asset, it has become accepted by many.
A certified financial planner Ivory Johnson and founder of a Wealth Management known as Delancey located in Washington D.C., has given us his view on Bitcoin and investing. Johnson believes that an apparent reason should be considered before buying crypto. An investment should not occur just because the price dropped, and it has become affordable for some. Investors should be conscious of their portfolio and be on top of whether the allocation comes hand in hand with their risk profile. New investors should also consider how much they’re willing to risk before beginning to invest and buy crypto.
Expectations When Investing:
Investors should keep in mind that crypto will continue to be volatile. Ross said that “You should fully expect that (crypto) will go down further, so only put in what you can afford to lose. If we wake up tomorrow and it goes to zero, you should be able to still pay your rent.”
Before investing in crypto, it is essential to have an investment plan and a secure financial situation. This way, you know which steps to take, and you don’t put yourself into a financial crisis.