Brian Kelly, BKCM Cryptocurrency Fund Manager and contributor to CNBC Fast Trader, believes this is the best time to invest in bitcoin, even after the major correction that hit the global cryptocurrency market.
Nearly 50% of all time
Since its peak of $ 19,000 in December 2017, the price of bitcoin has decreased by approximately 50%, from $ 19,000 to $ 11,000, as have the rest of the cryptocurrency on the world market. With the exception of Ethereum, most major cryptocurrencies such as Ripple and Bitcoin Cash have declined significantly by more than 50%.
While the price of bitcoin has dropped substantially, Kelly said the market is experiencing a shift in volumes from the Asian market to US and European-based retailers. Through bitcoin futures and tightly regulated exchanges, a growing number of institutional investors have begun investing in the cryptocurrency market.
"Now, when everyone says ... it's over, that's it, bitcoin is dead, for the 175th time, now is the moment you start looking at it, on the buying side And that money always comes in. The flow has not stopped, it's not the end of bitcoin, "said Kelly.
Even though the cryptocurrency market has become a $ 550 billion industry, Bitcoin remains the only cryptocurrency with support from institutional investors, financial institutions and strictly regulated exchanges such as the Chicago Board Options Exchange (Cboe) and CME Group.
Thus, while alternative crypto-currencies have become significantly more popular over the last six months, institutional investors entering the cryptocurrency market will first invest in bitcoin, before planning the diversification of their assets to other cryptocurrences.
It is also important to recognize that the reporting period in the United States is imminent and that the South Korean cryptocurrency market should allow new investors to open trading accounts by the end of the month. of January. These two factors will probably contribute to an increase in the volume and price of major cryptocurrencies, especially bitcoin.
Caution
Kelly pointed out that the cryptocurrency market is a bull market and that the vast majority of investors are very optimistic and enthusiastic. But, he noted that investors must be able to handle corrections of 20 to 30 percent because major corrections are regular events in the cryptocurrency sector.
"These things can go from 20% to 30% in a day," Kelly said, noting that a critical mistake often made by investors in the sector is selling too early. "Once there is momentum, you keep that thing [even if it's up 20 to 30%]."
As Litecoin creator Charlie Lee said, a bull cycle is almost always followed by a bear market. Bitcoin and most major cryptocurrencies had an incredible year in 2017 in terms of user growth, rising stock market valuations and general exposure. During the months of December and January, the market experienced some of the largest corrections in recent years.
However, as a bear market cycle is followed by a bear market, a bear market cycle is also followed by a bull market. As the cryptocurrency market continues to recover from recent corrections, bitcoin, being the reserve asset of the market, is expected to increase in the near term.