Few things can capture an investor’s imagination like FOMO, especially when that fear of missing out is rooted in six-figure-profit stories. Such may be the case for investors who witnessed bitcoin cross the $100,000 mark for the first time on December 5.
As market forces would have it, recent price action has brought the world’s first and biggest cryptocurrency back to a level where we can talk about “buying when there’s blood in the streets.”
Still, even with the recent correction, if you’ve been on the bitcoin bandwagon for a good length of time, you’re probably singing a merry tune.
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But if you’re among the multitudes who have shied away from what remains a volatile asset, perhaps you saw its recent peaks and started questioning your portfolio choices.
Has this bandwagon crossed the river for good? Is there still time to jump aboard?
Is it too late to invest in bitcoin?
Bitcoin past, present and future
Before you can determine if bitcoin is a good investment today, you need to be sure you understand what you’re getting into.
Bitcoin is a decentralized asset, meaning there is no government or bank acting as a central authority overseeing it. This puts it in a weird regulatory grey area that also makes it susceptible to fraud and scams.
For example, in 2011, Mt. Gox, the largest bitcoin exchange at the time, was hacked. The hackers made off with millions of user funds, but even investors not directly hit took a blow when the price of BTC plummeted more than 90%.
This is important for prospective investors to keep in mind: Bitcoin can fall as fast as it can rise — if not even faster. Indeed, we just witnessed the largest liquidation event in its history on February 3.
That said, bitcoin has continued to rebound from each of these falls. It soared to new six-figure highs as President Trump kicked off his second term after previously pledging to make the U.S. “the crypto capital of the planet and the Bitcoin superpower of the world.”
And it’s not only the U.S. that’s showing increased interest.
“Across the globe we are beginning to see federal banks purchase BTC as a reserve currency and there is massive momentum globally to establish legislative and regulatory standards,” says Robert Krugman, chief digital officer at Broadridge Financial Solutions. “The next several months should be quite telling.”
Bitcoin will probably continue to be a rocky ride, but experts say the chances of it going to zero are unlikely.
“Too many large institutions own cryptocurrencies,” says Dan Casey, founder of Bridgeriver Advisors and Panic Proof Retirement. “Whether you understand the blockchain or not,…
Read More: Is It Too Late to Invest in Bitcoin?
