If you have been following the market fluctuations of cryptocurrencies, then you must have noticed that bitcoins have significantly dropped in value. If you invested in bitcoin when it was hovering around the $15,000-mark last year, then you have already lost some serious cash. As per recent bitcoin news, the price of a single bitcoin is around $8,000. That’s after the prices recovered. On June 18th this year, the value of the coins was as low $6,387.
The good thing is that this is not the first bitcoin crash and it’s safe to say that it won’t be the last. Every single time in the past, a bitcoin price drop was followed by a surge in the prices. Back in September of 2017, the price of the coin went down 37% in a matter of days after there were speculations that China is going to completely ban bitcoin. The value of the coins soon recovered after the rumors died down.
Unfortunately, every time the value of the coins goes down, there are these onslaughts of media reports and blogs that “predicts” that bitcoin is done for good. This creates an unnecessary panic amongst investors. This is usually followed by an irrational and loss-inducing dumping of coin assets that drive the price further down. The bitcoin crashes are usually followed by rallies that not only recover the loss but take the value of the coins to unprecedented heights.
Why the Cloud of Bitcoin Market Crash Has a Silver Lining?
Presents a Great Opportunity for People Who Want to Get In: The fundamentals of investment teach us that when the prices reach new heights it’s a time to sell and when it drops or crashes it’s time to invest. The recent price crash may have gotten a few people panicked, but most seasoned investors are using this opportunity to stock up. Last year, when the prices of the coin almost reached $20,000, it was not only a bad time to buy, but the higher prices also made the coins inaccessible to a lot of new investors. The recent market crash has made bitcoin affordable again and it presented an opportunity for a lot of new investors to buy bitcoins for the first time. Seasoned bitcoin investors are also buying coins to strengthen their portfolio.
It’s Like a Discount Season for Many Smaller Cryptocurrencies: The crash of bitcoin, the leading cryptocurrency, generated a ripple effect that caused other smaller cryptocurrencies to lose their values. Ethereum was down and so was bitcoin cash, perfect time for investors to build their cryptocurrency portfolios.
It Proves That Bitcoin Behaves Like Other Assets and is Here to Stay: Any commodity or fund that continues to go up without the occasional dips and crashes, essentially behaves unnaturally. The value of these investment assets seem suspicious and artificially inflated. The fact that bitcoin prices crash and then recover, show that these coins follow the basic laws of supply and demand. Serious investors would find the market fluctuations much more reassuring than an unnaturally consistent surge of bitcoin prices.