Is it a good idea to invest in cryptocurrencies right now?
The value of many cryptocurrrencies have reduced a lot in the past few months, confirming that we are indeed in a bear market. Times like this is when the potential for massive profits is at it’s highest.
There are two popular sayings in the investment world and I will go through them both.
First Saying;
“You don’t make your money when you sell, you make your money when you buy”
The first saying refers to the fact that profit is all about the margin between the buying price and the selling price.
For example if you bought Bitcoin when it was $900 and sold when it was $15,000 you have made a $14,100 profit. Now if you bought Bitcoin when it was $8,000 and sold when it was $15,000 you have made $7,000 profit.
Buying into a cryptocurrency when it is cheap allows you to gain more profit when the value increases.
Second Saying;
“Be greedy when others are fearful and be fearful when others are greedy”
The principles of this saying are similar to the one above however this saying advises people to be wary of buying into an investment once it skyrockets and everyone starts buying in.
A good example is the 2017 period for cryptocurrencies when Bitcoin grew from $900 to $2000, at the beginning of the year the average Joe didn’t even know what Bitcoin was, but as soon as the price blew past the $2,000 many people started to talk.
Once the price of one Bitcoin blew past $1500, all of a sudden everyone was talking about Bitcoin, people who barely even understood cryptocurrency where putting money into it.
Moral of the story:
Buy when the prices are low, and sell when the prices skyrocket.
Final thoughts
Buying into cryptocurrency is a great strategy during a downturn since historically, Bitcoin and other good cryptocurrencies have always rebounded and gone onto higher levels.
Here is a final quote I will leave you with:
“Buy when the blood is running in the streets, even if it is your own”
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