Sat. Aug 13th, 2022

Crypto market bleeds as support fails

While the move today was anticipated, it is nonetheless an important event and equally important to analyze. Cryptocurrency investors, traders, analysts and pundits are not the only ones who are reporting on the recent bear move in cryptocurrencies, but some big-name traditional investors are commenting as well. Newsbtc reported that Peter Schiff – a long-time critic of Bitcoin – said that the recent –40% wipe from the 2019 high is proof that Bitcoin is a pump and dump. Even Forbes has commented on the most recent wipe, with the author warning that investors and traders should make sure they are not trading in the wrong direction. However, Forbes does provide a little good news: while the bear is bad for short-term holders, it’s great news for the “long-term acquirer.”

For the cryptocurrency investor (like myself), I am happy with any drop in price. Traders (of which I also am) who are long during a down drive are negatively affected by bear moves, but investors are not. And I think most people would be better off being investors in this market than traders – for a great many reasons. First, this market is extremely long-biased. It’s very much like the stock market in that respect. Second, it is still a new asset class that is in its infancy. Third, and most importantly, Bitcoin itself will eventually get an ETF, which will open Bitcoin and the broader cryptocurrency market as a whole to trillions of traditional, fiduciary investment monies. If you are a long term hodler and investor, then any time Bitcoin or the entire cryptocurrency market drops in double-digit percent losses, I look at it as a discount – a fire sale. The problem, always, is determining where the bottom of the fire sale is at. This is more important for the short term trader than it is for the investor.

Bitcoin is a great example of the power of dollar-cost averaging. Depending on how long you have been investing in Bitcoin, you may be in the red with your investment – especially since late 2017. But time likes this are great opportunities to bring that aggregate cost basis down and generate substantial discounts at the same time. At the time of writing this article (1400 EST), an update to Newsbtc’s article on comments from Peter Schiff reports that he claims. Bitcoin will dump to $1,000. I am fully convinced that Mr. Schiff’s (I am a fan of his – I am a fellow gold bug) commentary is meant to generate an emotional response to the ‘fans’ of cryptocurrency – and not to investors. If he can, in some way, add to the flames of uncertainty to the retail holders of cryptocurrencies, I am all for it. I am all for Bitcoin dropping to $1,000.

There are a great many people who would have wished they could have bought Bitcoin in mid-2017 for $1,000 and feel like they may have missed the boat when it ran up to $20,000. A return to $1,000 – or any price below $5,000 – would be a wonderful, wonderful gift.

By Dov Herman

Dov is a Blockchain and Forex trading enthusiast, who spends most of his time trading and examining software who are related to cryptocurrencies and forex trading. You can follow on Dov’s reviews and articles here on TrustedBrokerz and across the web.