Should you buy “Dip” as Bitcoin and Ethereum prices are at their lowest? Here’s What the Experts Are Saying

In case you didn’t know, bitcoin is on “promotion” right now.

So think two experts and a major financial institution who claim that bitcoin is currently undervalued at $20,000. JPMorgan Chase recently priced the coin at $38,000, about 90% more than its current price.

Bitcoin could be worth as much as $100,000 within two years, while its fair market value is currently between $40,000 and $50,000, according to Jurrien Timmer, director of global macroeconomics at Fidelity Investments. Chris Brendler, managing director and senior market analyst at DA Davidson, expects bitcoin to rally back to nearly $38,000 by the end of the year and $50,000 by the end of 2023 .

“Bitcoin is a unique animal because it’s hard to tell what exactly it’s worth,” says Brendler. “It tends to see exaggerated upward moves when people buy only because they want its value to rise. When the value starts to drop, these people pull out. But the price of bitcoin will be higher than today in the years to come. »

So what does this mean for crypto-curious who are considering investing in bitcoin? Is it a good time to take advantage of the “sell” in the cryptocurrency market and invest?

According to some financial experts, the short-term risks of investing in cryptocurrencies can be worth the rewards in the long run, as long as the investment doesn’t interfere with your other financial responsibilities and you can clarify your long-term goals beforehand.

Here’s what you need to know before investing in bitcoin and other cryptocurrencies in an economic downturn:

What’s going on with cryptocurrency prices?

The crypto and stock markets have had a turbulent year so far. See also: Why is Solana (SOL) Price Stalled as the Cryptocurrency Market Slowly Recovers?. Bitcoin, Ethereum and crypto prices have crashed along with the stock market over the past few months as investors grapple with continued runaway inflation, Russia’s war in Ukraine, rising interest rates and fears of recession.

The latest cryptocurrency market crash came after the May inflation report showed prices remained high for consumers and the Federal Reserve raised its benchmark interest rate by 75 basis points – the largest increase in nearly three decades. Around $2 trillion was wiped out of the cryptocurrency market, and the S&P fell into a bear market.

On Saturday, bitcoin dipped below $18,000 — a new low since December 2020 — but fought back above $20,000 on Monday. Bitcoin continued to hold above $20,000 on Thursday, but is still down nearly 70% from its all-time high of $69,000 in November 2021.

Ethereum, meanwhile, fell below $1,000 over the weekend for the first time since January 2021, as the network prepares for a massive and long-planned upgrade. Most cryptocurrencies tend to follow bitcoin’s example. This means that if the price of bitcoin is down, ethereum and other cryptocurrencies are probably down too.

Still, some experts believe Bitcoin and Ethereum prices could drop even lower. According to Kavita Gupta, venture capitalist and founder of the Delta Blockchain Fund, this could be the start of a “crypto winter”, an extended period where prices fall and remain low, as was the case between early 2018 and mid-2018. -2020. Ms. Gupta claims, based on her technical analysis of the market, Bitcoin could fall to $14,000 and Ethereum to $500 in the coming weeks or months.

Should we buy the bottom of the wave? How to invest smartly in cryptocurrencies?

Now is a good time to enter the cryptocurrency market as long as prices are low, but only after assessing your risk tolerance and prioritizing other aspects of your finances, like savings, experts say. in an emergency, paying off high-interest debt and investing in a traditional retirement account like a 401(k). On the same subject : Small cap Altcoins beat bitcoin and other cryptoassets 10 to 1, but why?.

If there’s one thing you need to know about investing in cryptocurrencies, it’s that they are volatile and highly unpredictable. Values ​​fluctuate every minute due to speculation, hype and the vagaries of general economic conditions. Potential investors who want to buy now when the market is falling should understand that price fluctuations are normal and be prepared for prices to fall even further. If you cannot withstand strong market fluctuations, you should not invest in cryptocurrencies.

When it comes to your overall crypto investment strategy, only invest what you are willing to lose. Experts generally recommend investing no more than 5% of your portfolio in crypto. Bitcoin and Ethereum are the two cryptocurrencies that represent the best starting point for new investors, according to experts and NextAdvisor’s Investability Score.

Bitcoin holds the highest score of any cryptocurrency, followed closely by Ethereum. Here’s how bitcoin and ethereum compare to the rest of the cryptocurrencies that regularly appear in the top 10 by market capitalization, excluding stablecoins:

Thomas Estimbre
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Should you buy “Dip” as Bitcoin and Ethereum prices are at their lowest? Here’s What the Experts Are Saying

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