The first quarter of 2018 was perhaps the worst time for cryptocurrency markets as prices went on a free-fall. Many currencies dropped by 50-60% and some of the worst affected currencies dropped by as much as 75% from their all-time high prices. Bitcoin too, was affected by it. Bitcoin prices had topped $19,500 and were eyeing the $20,000 mark. However – this did not happen – as the currency fell to a low of $6600 over the next four months.
It wasn’t just Bitcoin which was hit adversely. Considering that a large amount of cryptocurrencies are dependent upon Bitcoin prices – they too, took a hit. Bitcoin price dependence has been a matter of major controversy over the past year. However, this continues to affect the cryptocurrency prices and the fate of Bitcoin is the fate of most other ‘altcoins’ in the markets.
However, even though the cryptocurrency markets may be underperforming right now, this is a good time to invest in Bitcoins. Regardless of other currencies booming at a much faster pace – Bitcoin mining remains the king of the jungle. While this may sound like an odd piece of advice, let us take a detailed look at why is it a good time to buy Bitcoins.
Why is Investing in Bitcoins Still a Good Idea?
Bitcoin’s dominance is surging in the markets again. (Bitcoin dominance, for those who may be unaware, is basically the percentage of Bitcoin holdings compared to all cryptocurrency holdings). As of this writing, Bitcoin Dominance is somewhere around 42% – indicating that 42% of all cryptocurrencies in circulation are Bitcoins!
Moreover, when compared with other cryptocurrencies – the capacity of Bitcoin to rebound is much higher. In 2017, Bitcoin prices went from $3900 to $19000 in six months. Bitcoins potential for growth has been witnessed a number of times. The currency has successfully bounced back from various price-dips.
Moreover, when you look at the historic price-drops – there has been a trend. The first quarter has traditionally been the slowest for Bitcoin prices – with prices tumbling down and the last quarter the fastest growing. A historic analysis of Bitcoin prices shows that it is a good time to invest in Bitcoins.
Moreover, there have been three more trends which indicate that while prices may be on a slowdown, the markets are still optimistic:
- Institutional Investors – Big-money players which set up hedge funds to invest into cryptocurrencies are on the rise. These ‘institutional investors’ are expected to help Bitcoin prices grow over the course of the year. Major firms such as Grayscale Investments, Founders Fund, etc are expected to make huge investments – which will help the cryptocurrency prices grow again. There has been a marked rise in the number of hedge funds, which have almost doubled when compared to the previous year. These players are expected to infuse a large amount of cash-flow in the crypto economy.
- Bitcoin ATMs – This has been a small indicator of big things to come. The number of Bitcoin ATMs has been on a surge. Despite cryptocurrency prices falling, Bitcoin ATM installations are increasing, particularly in the US. This shows that there is still faith in the markets that people do want to buy Bitcoins and they are looking for easy alternatives to get them.
- Registrations at Exchanges – Finally, the most recent trend of them all, Bittrex, which had closed its registrations for a few months – has now re-opened them. However, they were not prepared for the large volume of people who came up. This shows that despite the recent market slowdown – there is no lack of interest and even a slight sign of a bull-run would get the markets get thriving again.
One of the Biggest Bitcoin Problems Has Just Been Solved!
Moreover, another major reason why some people were unhappy with the cryptocurrency markets was that the Bitcoin transaction fees was high and the transaction time was taking too long too. Basically, the problems of the real-world banking system were being reflected in the cryptocurrency markets as well. However – this is a non-issue now. The arrival of technologies such as the lightning network and segregated witnesses (SegWit) have helped improve upon those fronts – as the transaction fees has dropped massively and the transaction time too, is on a decline.
This is indeed a good opportunity to invest in Bitcoins because the currencies are still trading at a price which is quite low. As conventional wisdom suggests, buy the dips and sell the highs!