The cryptocurrency world has lost a chilly $1 trillion of market cap, which is currently valued at $1.3tn as of this writing. The cryptocurrency market crash is hitting all the big and small crypto coins; bitcoin, in particular, has taken a significant hit on its market value. Bitcoin was once trading at nearly $69,000 apiece, but began its recent fall from grace way back in May, when it fell below a psychological $12,000 level, thanks to a widespread cryptocurrency market collapse.
It’s not all doom and gloom…
Bitcoin is a good proxy for the sector, as Bitcoin is the largest cryptocurrency by market capitalization, and the rest of the market tends to follow its trends. So generally speaking, if you know how to buy bitcoin then you also know how to buy algorand, etc. As cryptocurrency prices become more predictable, there is the potential for cryptocurrency to become used more as a medium for commerce and less simply a store of value, which could paradoxically lead to it reaching levels in the market that have not been seen before. It is probably going to take a lot longer for bitcoin to be considered a wise financial decision for spending it on goods or services, but more institutional adoption may lead to a greater number of use cases among day-to-day users, which could, in turn, impact crypto prices.
Factoring-in ‘self-fulfilling prophecies’
Media exposure for cryptocurrencies may also have a significant effect on the price of Bitcoin in the near future. We saw bitcoin reach new record prices, regulatory talks that could potentially have major impacts on the industry, and increased institutional buying by large companies. Now, a lot of investors are going to wonder what makes us and other analysts so confident Bitcoin will keep rising in value.
Only way from rock-bottom…
Bitcoin fans will hope that the recent spectacular crypto collapse was just a temporary setback, and will question whether they should jump at the chance to buy more, hoping for an equally spectacular rally. Given the Bitcoin price has stabilized since its lowest points this year back in June — and has indeed increased as much as 20% over the past few weeks — it may well be that cryptos bottom is now behind us, creating a chance to invest for the next long-term cycle. Bitcoin has a long history, and market trends suggest August is typically a better time to buy crypto.
Since a lot of people receive their salaries mid-to-late-month, bitcoin prices are likely to increase rapidly. In a week where the price of Bitcoin is lower, you might think your investments were not profitable during this period.
The bigger picture
If you look at the bigger picture, there are some weeks where Bitcoin is high, and your investment is paying you good returns. With the price of cryptocurrency at such low levels, this may appear as an ideal time for first-time buyers to invest, following industry figures such as the matic price prediction data. When cryptocurrency experiences such massive drops across the board, many investors and enthusiasts start pushing the age-old investing maxim that it is a great time to buy the dip — because many are hoping that these lows are indicative of a temporary dip, not a prolonged bear market.