When to Buy in New Era of Cryptocurrency Regulation
Bitcoin and other cryptocurrencies have tanked this past month and a half, peaking at $20k and crumbling down to $8k at a rapid pace. This has been for a variety of reasons, spanning from January blues to stricter regulations to concerns over Tether. Have we reached the dawn of the next era for Bitcoin?
In my opinion, we have. It is currently looking like 2018 will test Bitcoin and other cryptocurrencies as regulators discuss it more and more frequently. Opportunistic journalism will, as always, exaggerate movements in both directions (hint: It's not just FUD, it's also FOMO). More companies will feel forced to have a stance on the cryptocurrency phenomena, likely all echoing the same statement of "it's too volatile, but we like blockchain."
It should be interesting to see how this all plays out, but my investing strategy has not changed. I will still have a limit order in at around $8,300 (which Bitcoin bounced above just after this video was recorded, but will keep limit in).
I suspect the bubble hasn't popped yet as the speed of Bitcoin's rise didn't give much opportunity for many people to buy in and many felt they have missed the wave. If we start to see another substantial pump, many will jump on board, fearing missing out for a second time. Of course, this is only speculation as bubbles are difficult to call.
However, this is my viewpoint and I will stick with it. As always, moments like these illustrate why you should be diversified into other asset classes besides cryptocurrencies so that you aren't overexposed to the risks in this field. Best of luck to all of you and happy investing!