Although Bitcoin is different from other types of financial assets, it’s still very similar to traditional investments. Like bonds, stocks, and currencies, it’s a digital asset that can be used to preserve and grow wealth as well as diversify one’s portfolio. With recent market volatility, many are wondering if they should invest in Bitcoin in 2022.
Bitcoin is a unique type of financial asset that can be compared to gold. It could potentially replace the US dollar as the global reserve currency. Unlike traditional stock or gold, it is a digital commodity.
Bitcoin’s price has continuously risen since it was first launched. it was $0.003 at its launch, and since then, Bitcoin’s price has risen to $60,000 before correcting to around $20,000. For many investors, this wild ride has resulted in millions in profits.
Right now we have an incredible opportunity with the current discount in the cryptocurrency market. The current price of Bitcoin is around $20k and our team of experts at Wealth And Loyalty, expects Bitcoin to hit between $10k to $5k USD before the end of 2022, this is when we will be heavily investing capital into various cryptocurrencies, not just Bitcoin.
Is it Worth investing in Bitcoin in 2022?
Despite the initial struggles during the first half of the year, experts like ourselves believe Bitcoin will eventually reach $100,000 + the downtrend this year was expected due to the crypto cycles, crypto simply moves up or down whatever side you are looking at it, every 4 years. It goes up due to something called the Bitcoin halving event, and it then has a bear market for around 1 year… 2020 was the previous start of the bull market where it went up for just under 2 years, it then had the expected bear market in 2022, which has happened to perfection. This is a normal cycle, a crypto bear market lasts for around 1 year. At the end of this year is when we expect the crypto market to bottom out.
Despite the recent volatility, many experts still believe that Bitcoin will eventually reach $100,000. A study conducted by Deutsche Bank revealed that a quarter of Bitcoin investors expect the price of the digital asset to reach $110,000 within five years.
The volatility of Bitcoin is nothing new, but experts advise new investors to be cautious when if they are considering investing in Bitcoin in 2022. Bitcoin has historically performed well when compared to other types of financial assets. In 2020, central banks were able to print at full speed due to the pandemic, which caused investors to pile in.
According to Martin Hiesboeck, a blockchain and crypto research analyst at Uphold, investors are still concerned about the long-term viability of the cryptocurrency industry due to the actions of several companies. These include the layoffs of several prominent players and the halting of withdrawals by certain centralized exchanges. Despite the recent market volatility, many view cryptocurrencies as ideally positioned to weather economic and political turmoil as they are not tied to central bodies or governments.
Despite the various threats that have been presented to the cryptocurrency market, the market is still showing strong signs of growth and increasing adoption, which are driving value.
Is Bitcoin a Safe Long-term Investment?
Since cryptocurrencies aren’t regulated by the Securities and Exchange Commission or the Financial Industry Regulatory Authority (FINRA), many financial firms don’t allow their clients to buy and hold digital assets on their own. Instead, they provide guidance on how to make their own purchases.
Some fee-only financial firms are testing the waters when it comes to providing their clients with the ability to buy and manage cryptocurrencies. Once the SEC and the FIRA finalize regulations, several major financial firms such as Fidelity and Schwab are likely to start adding cryptocurrencies to their platforms.
This will allow advisers to monitor the performance of cryptocurrencies and make informed decisions regarding their clients’ investments. One of the most critical tasks of an adviser is to regularly re-enter and exit portfolios that are allocated to certain types of assets.
Despite the various threats associated with the cryptocurrency market, experts believe that cryptocurrencies will eventually be regulated as a type of financial asset. This will allow investors to have the same level of protection that they have with traditional investments.
If you’re planning on making a significant investment in cryptocurrencies, it’s important that you hire a financial adviser or work with a reputable investment company. They can help you navigate through the various risks and opportunities in the market.