Bitcoin’s price has been hovering around $40k for days now with no particular direction, so is it worth buying Bitcoin now?
Why buy Bitcoin now
Well-known American influencer Natalie Brunell tweeted:
“When #Bitcoin is back in the 60s and beyond we will all wish we stacked a little more right here…”
These words make it very clear that this would be an opportune time to buy Bitcoin at a good price, before the next likely, in her opinion, upward move to at least $60k.
Indeed, there is a lot of discussion about Bitcoin’s prices, after the all-time highs reached in November, about what its path might be in the coming months.
Many continue to argue that in 2022 Bitcoin will still reach and probably exceed $100k, one example being the CEO of cryptocurrency lending company Nexo, Antoni Trenchev, who on 3 January said he was confident that by June the price of BTC will be at $100k.
But others argue that for Bitcoin and major cryptocurrencies a long period of bear market may have begun. Investment firm Invesco, in a report two days ago, said there is a 30% chance Bitcoin will fall below $30,000 in 2022.
Staking to make money with crypto
Beyond price predictions, which are a waste of time, it is perhaps more interesting to understand what the right strategies for investing in cryptocurrencies might be beyond the sentiment of the markets at that particular moment.
There are a number of instruments that can provide some hedging against momentary market declines. One such tool is staking, which allows users to make money by holding cryptocurrencies in their wallets and earning fees from lending them out or during the Proof-of-Stake block validation process.
This is an easy, transparent and secure way to earn money, even in the current bear market.
Brokerage and other investment strategies
As cryptocurrency is a financial market, the same rules and strategies apply to traditional financial instruments such as shares and bonds.
In the long term, the strategy of recurring buying allows taking advantage of possible rises and buying opportunities in a bear market phase. The practice of brokerage is a very dangerous strategy and destined more to great investors because it risks becoming very expensive in longer phases of a bear market.
Certainly though, if you think about where Bitcoin prices were just two or three years ago, you can see what gains could have been made by adopting these investment strategies.
In the cryptocurrency markets, there is also the possibility to put one’s own coins into income by “locking”‘ them for a certain period of time. In this way, cryptocurrencies are made “available” to the market, just as in the traditional capital market with the lending of securities.
The explosion of DeFi has certainly launched the phenomenon of stablecoin lending, which in some cases has very attractive fees.
In addition, stablecoins, being pegged to the dollar, guarantee less volatility than traditional digital currencies such as Bitcoin or Ethereum.