With Bitcoin in Freefall is this the Right Time to Invest?

Bitcoin’s prices have been falling since the start of the year due to fears among investors regarding the regulation of the cryptocurrency. In March, the prices of Bitcoin plummeted below the £7,200 mark and settled at £7,010 after the Securities and Exchange Commission in the U.S. said that it will require cryptocurrency exchanges to register with them.

In the UK, Bitcoin transactions made via exchanges remain legal but the government is also planning a strategy to regulate the cryptocurrency. The Guardian states that both the UK and EU are both planning on a crackdown on Bitcoin due to fears of the cryptocurrency being used to fuel illegal activities like money laundering.

Now that Bitcoin’s prices are falling, is it a good time to buy some of this cryptocurrency? Financial expert Brian Kelley believes that it is still a good time to invest, especially since Bitcoin’s prices almost always bounce back from a freefall.

A freefall separates true investors of Bitcoin from those who are merely jumping on the bandwagon. By taking advantage of the price drop, investors who are believers of the cryptocurrency but cannot get exposure to it before because of its high prices now have a good entry point. “(Falling prices are) incredibly healthy for the ecosystem,” said Kelly. “You shake out the weak hands. You get strong hands in there.”

Bitcoin surge

In December 2017, Bitcoin surged to £7,910, and then dropped by 15%. However, before the month ended, the price of the cryptocurrency surged to almost £14,385. In March, Bitcoin seems to be consolidating its prices after sharply declining from £14,385 to £7,190. Nadex outlined how the cryptocurrency increased 20% higher through the course of one week, as the market processed a series of consolidations above the $10,000 (£7,215) price mark. Analysts point to this recent historical data when they say Bitcoin always recovers after making a significant drop.

For retirees who want to invest in the cryptocurrency, a previous iExpats post on the pros and cons of investing in Bitcoin is worth a read. Putting a small percentage of money in Bitcoin shouldn’t hurt as it can prove to be a great way to diversify your portfolio. Although, it is important to note that the cryptocurrency industry remains an extremely volatile market, which means that Bitcoin investments can be gone in an instant. Should this happen, investors won’t have any insurance to rely on because cryptocurrencies only exist in the digital world.

Retirement Researcher mirrored our sentiments by saying that retirees who enjoy having some money invested in Bitcoin shouldn’t have any problems with their portfolio. However, since Bitcoin doesn’t retain its high value for a long time, retirees must consider the fact the cryptocurrencies shouldn’t be relied on as an effective tool to fund retirement.

In investing, people buy assets low and then sell them high. Since Bitcoin’s prices are now falling, it’s a good opportunity for anyone who wants to enter the market. Just bear in mind that Bitcoin should always be bought with caution due to its volatility.

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