The best long-term investment channel is used to be one of the expectations about bitcoin. But now this cryptocurrency is plunging. So what’s going on and what’s going to happen.
Miners, investors, and sharks are all holding their breath waiting for the next developments in the virtual currency market with the leader of Bitcoin.
Bitcoin dropped 10% in value on April 23, shocking the entire market.
Since its peak, the virtual currency has fallen 21% to the threshold of $ 48,000 and is resisting at the $ 50,000 zone for two consecutive days.
According to experts, at least three scenarios are waiting for Bitcoin next week as investors are impatient and cannot wait any longer.
Bitcoin goes down
This is the most obvious scenario because Bitcoin has been in the safe zone for too long and has consistently peaked from the beginning of the year until now.
Any stock cannot stay at the top forever, and cryptocurrencies are no exception, especially when people are arguing whether investing in cryptocurrencies is the best long-term investment method.
The worst-case scenario is that Bitcoin falls below safe levels, disrupting the entire market, investors flee and the virtual currency returns to post-2018.
If this happens, altcoins (coins Small value grass, junk coin) will attract investors more than the main coin because they can see it as a lucky lottery.
A good scenario is that Bitcoin goes down to the $ 40,000 – $ 43,000 resistance level, then bounces back and pulls the market up.
At that time, Bitcoin’s resilience was huge and the coin could break $ 70,000 and even hit $ 100,000 and then $ 200,000 as forecast by experts.
Bitcoin is sideways
With about 18.6 million dongs mined but only about 1.4 million coins circulating on the exchange, it shows that investors and miners tend to hold assets waiting for this coin to increase the price.
This makes both the push and the downforce are not strong enough to pull Bitcoin both down and up, although it is still highly liquid due to its large capitalization.
This scenario, if it happens, will make it difficult for other cryptocurrencies to have a strong rise or decrease that depends on the pump and discharge cycle of the shark.
Many experts give comments for the market at this time, but it is not considered as financial investment advice, especially for the best long-term investment plans.
Even so, there are special exceptions like Ethereum and Binance Coin. In fact, for the past two months, the rise and fall of Bitcoin have not affected the second and third largest market cap currencies.
Not to mention, Ethereum and Binance Coin also exert an influence on a wide range of secondary virtual currencies (tokens) that develop on its ecosystem.
At that time, the market will self-adjust so that Bitcoin gradually reduces its holdings to below 50% of the current market cap.
Bitcoin continues to go up
This scenario is relatively unlikely considering the recent negative signals for Bitcoin. To have a strong enough thrust at the moment, Bitcoin needs more idle cash flow from other best long-term investment channels such as stocks, gold, savings deposits…
Meanwhile, the entire virtual currency market capitalization is now only about $ 1,800 billion, down about 16% from the time when Bitcoin peaked.
Until then, Bitcoin needs to keep its value in a safe area and wait for positive signals from governments or organizations, and corporations around the world. If not, a worst-case scenario could happen as the first scenario.
Another scenario is that Bitcoin will go up in the 54,000 – 56,000 USD zone, but the pressure of stop-loss investors will drag the coin down again and again.
Bitcoin or gold? Which is the best long-term investment channel?
After that, it is difficult to predict whether Bitcoin will bounce back or pull the whole market out of battle.
And since then, it seems that gold is returning to hold its advantage as the best long-term investment option.
For Plurimi Wealth Chief Investment Officer Patrick Armstrong, who allocates 6.5% of his investment to gold, even with a higher outlook for Bitcoin, if you choose bitcoin as one of your best long-term investments, the accompanying risk is too great.
He argues that gold has a long history as a store of value that Bitcoin cannot match. “In the world of transactions based on monetary expansion, maybe Bitcoin excels. But also maybe Bitcoin has no value in the years to come,” he said.
Meanwhile, some experts believe that the main driver of Bitcoin’s rally is still the speculation and FOMO sentiment (fear of missing opportunities).
Joseph Edwards at Enigma Securities (UK) said that Bitcoin needs more time to demonstrate quality as the best long-term investment channel other than convenience and divisibility. It took 12 years for Bitcoin to demonstrate endurance.
So, gold and virtual money are not meant to be substituted but are meant to be options for holders. Each has a different strength and weakness.