The second quarter of 2022 saw Bitcoin suffer its greatest quarterly loss in more than ten years, losing around 58 percent of its value.
Many people feel this is the worst time to own or buy bitcoin. And that’s why many investors are selling their bitcoin at a loss. Others are holding off plans to invest in cryptocurrencies, fearing the market will crash soon.
So, is bitcoin worth it in 2022?
Read on as this blog shares the potential opportunities and risks of investing in bitcoin.
What’s Causing the Bitcoin’s Price to Decline?
As a smart investor, you should investigate what’s causing the bitcoin price to decline. The idea is to know the forces that affect the cryptocurrency market. This information makes it easy to know whether the crypto market will survive the current turmoil.
Here are the key things that are causing the bitcoin price to decline.
The Global Recession
Most countries are still struggling to recover from the economic hardship caused by the pandemic. So, people in these countries have been liquidating their investments to raise money to meet basic needs. And that’s why many investors have been selling their cryptocurrencies.
Also, due to the global recession, many people are struggling to make ends meet. Countries are struggling with food shortages leading to high inflation rates. People in these countries are finding it hard at the moment to save money and invest.
All these things are negatively affecting the cryptocurrency market. They’re causing a high bitcoin supply and low demand: and that’s why the prices are fluctuating.
The great news is that things will change, and the global economy will stabilize. When this happens, people’s disposable incomes will increase, and they’ll have money to invest.
Panic Selling
One of the biggest contributors to the current crypto market crash is panic selling. Many people are selling their bitcoin to get out before further price declines. These people are losing confidence in bitcoin as a viable investment tool.
They fear that the crypto market will collapse and bitcoin will become worthless. Unfortunately, most of these investors are struggling to see past their irrational fears. They don’t realize that it’s normal for prices in different investment markets to fluctuate.
After all, this is not the first time the bitcoin price has dropped. It had happened several times before, and each time it recovered. So, if you still own bitcoin, avoid panic selling; instead, wait for the market to recover.
The market might not recover this year (2022), but it’ll eventually. So, learn to see bitcoin as a long-term investment to avoid panic selling.
Market Supply
Although bitcoin still holds the biggest market share, other cryptocurrencies are slowly catching up. There were over 4,000 crypto coins in 2021. Investors feel one of these coins will be the next big thing.
Investors are liquidating a portion of their bitcoin investment and using the proceeds to buy these other coins to maximize their returns. They hope to diversify their cryptocurrency portfolio to lower risk and maximize returns. So, this competition is reducing bitcoin demand and increasing the supply.
Fake Crypto Exchanges and Crypto Scams
Scammers have been creating fake crypto exchanges and coins to steal from people. Unfortunately, many people don’t know how to identify these scams. Some even claim that bitcoin is the modern-day Ponzi scheme.
However, this isn’t the case as bitcoin has now been around for more than ten years. Yes, the number of cryptocurrency scams has been increasing, but this shouldn’t deter you from investing. You should learn how to spot a bitcoin scam to avoid becoming a victim.
Also, instead of using a cryptocurrency exchange, consider using a bitcoin ATM. The idea is to enhance privacy and execute bitcoin transactions quickly. Check out online resources for more info on how bitcoin ATMs work.
You want to learn how to buy and sell bitcoin using these ATMs. Also, find out how using these ATMs will reduce the risk of falling for a bitcoin scam.
Although the cryptocurrency market might not recover this year, in the long run, it will. All you need is to hold long enough to withstand the current crypto market turmoil.
Is It Advisable to Invest in Bitcoin with the Current Market Turmoil?
One of the biggest bitcoin debates in 2022 is whether to invest or to wait for the market to stabilize. Some people argue that the cryptocurrency market will collapse and bitcoin will become worthless. Others claim this is the best time to invest in bitcoin to take advantage of the low price.
Here’s why you should consider investing in Bitcoin in 2022 despite the current cryptocurrency market turmoil.
To Leverage the Low Prices
It sounds counter-intuitive to buy bitcoin when everyone else is selling. Your first instinct is to follow the masses and liquidate your bitcoin investment. Sadly, if you follow the masses, you’ll lose money by selling your bitcoin in 2022.
You must learn to move against the masses and take advantage of the current low bitcoin price. So, buy bitcoin now and grow your cryptocurrency portfolio. Understand that the bitcoin market will stabilize, and you’ll make a killing.
Blockchain Technology Is the Future of Finance
Despite the current bitcoin market turmoil, experts agree that blockchain technology is the future of finance. Blockchain simplifies decentralized finance (DeFi), overcoming the traditional challenges of using banks. DeFi allows investors to execute transactions in real-time.
Also, this technology enhances transactions’ transparency and reduces transactional costs.
So, given bitcoin is built on this technology, it’s safe to assume it’ll survive the current crypto market turmoil. The reason is that many experts claim that bitcoin is the future mode of payment. After all, currently, there are several huge brands allowing their customers to pay with bitcoin.
You can bet that with time other businesses will catch up with this trend and start taking bitcoin as payment. Once this happens, the bitcoin value will skyrocket, and investors will make a killing.
To be among these investors, you should consider investing in bitcoin today. So, ignore the masses who are claiming Bitcoin is dying.
Bitcoin is a Great Long-Term Investment
People who are panic selling their bitcoin have a short-term perception. They see cryptocurrencies as “get rich quick schemes,” yet they’re not. So, it’s understandable that these people are selling their bitcoin due to the current price decline.
They fear that the bitcoin price will keep declining, and they’ll lose everything.
As a smart investor, you need to develop a long-term perception when evaluating investment opportunities. The long-term perception will help you see past the current bitcoin market turmoil. You’ll realize that the market will eventually recover, so it makes sense to buy bitcoin in 2022.
Also, investing in bitcoin will help you hedge against the negative effects of inflation. The idea is to leverage bitcoin’s long-run appreciation to store value.
To Diversify Your Investment Portfolio
As a savvy investor, you understand that you need to hold different financial instruments. So, you’re mistaken to feel bitcoin is too risky to add to your portfolio. You need it to balance off risk and increase returns.
The idea is to leverage bitcoin’s huge growth potential to grow your portfolio. If you buy bitcoin now and the market recover, you’ll make a killing. Yes, it’s impossible to tell how long the market will take to recover, but it will.
The secret is to get in now when the bitcoin price is low to avoid missing out when the market recovers.
So, although investing in bitcoin in 2022 is risky, it’s worth it. Take advantage of the low bitcoin price to venture into this field. The idea is to diversify your portfolio by adding bitcoin.
How to Manage Bitcoin Investment Risks
Like all other investments, bitcoin carries different forms of risks. Yet, this shouldn’t deter you from investing in bitcoin, as the returns are worth it. All you need is to learn how to manage bitcoin investment risk.
The idea is to learn the best time to increase your bitcoin investment and when to liquidate.
Here are practical ways to manage bitcoin investment risks.
Always Do Your Own Research
The masses tend to exaggerate the risks of investing in bitcoin, so ignore the masses. Although it’s okay to follow bitcoin discussions online, don’t believe everything you read. Most of the bitcoin comments you read online are false and misleading.
They are from people with limited knowledge of how blockchain technology work. So, these people are making misguided bitcoin speculations, and it’s wrong to follow them. Learn to do your own cryptocurrency research to make informed bitcoin investment decisions.
Look for credible websites that share genuine and reliable bitcoin information. These are websites that share insights from reputable cryptocurrency gurus. You want to keep up with the latest cryptocurrency market trends.
This information will help you make sound bitcoin investment decisions. The idea is to observe the market trends to know the best time to buy or sell bitcoin.
Develop a Cryptocurrency Investment Strategy
One of the worst mistake bitcoin investors make is allowing their emotions to take over. They allow fear to push them into selling their bitcoin. Also, due to emotional attachment, they struggle to sell their bitcoin when they should be liquidating.
You need to develop a crypto investment strategy to avoid making this mistake.
When developing this strategy, decide how much money you’ll allocate for bitcoin investment. To mitigate risk, only invest an amount you can afford to lose. So, avoid borrowing a huge amount of cash to buy bitcoin; only borrow what you can repay easily.
Also, your cryptocurrency investment strategy should guide your bitcoin trading actions. The idea is to have specific metrics that direct you on when to buy or sell bitcoin. You want to stop relying on emotions when making bitcoin investment decisions.
Finally, revise your crypto investment strategy periodically. You want a comprehensive bitcoin investment blueprint to boost returns while lowering risk. The idea is to eliminate redundant tactics and replace them with effective ones.
Diversify Your Cryptocurrency Portfolio
Many people only consider bitcoin when considering cryptocurrency investment. And you can’t blame them, as bitcoin is the most popular crypto coin. Yet, to reduce risk, you need to invest both in bitcoin and other crypto coins.
To learn which cryptocurrencies to buy, read their whitepapers. You should know the blockchain technology behind a given coin to understand what gives it value. Next, check the coin’s market capitalization and trade volume.
The best cryptocurrencies to buy have substantial daily trading volumes. These coins have a rapidly growing demand, so it’s safe to assume their prices will increase. However, no matter how strongly you believe in a particular cryptocurrency, don’t go all in.
Your best approach is to distribute your investment across different cryptocurrencies. The idea is to spread risk while maximizing your returns. So, look for more resources to guide you on how to diversify your cryptocurrency portfolio.
Is Bitcoin Worth It in 2022? Yes!
The quick answer to the question “is bitcoin worth it in 2022” is yes! Bitcoin, like all other investments, is risky, but it’s worth it. The current bitcoin market turmoil will pass, and investors who hold on long enough will make a killing.
So, leverage the current low bitcoin price to grow your cryptocurrency portfolio. Also, rely on the above tips to manage bitcoin investment risks.
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