It’s no secret that the last year has been rough for crypto.
Bitcoin (Bitcoin 8.96%) When ethereum (ETH 6.27%) Both are down about 70% from their peak, Cardano When Solana About 90% less. These numbers are hard to stomach and many investors have fled the cryptocurrency market in recent months.
If you’re nervous about the current market, you’re not alone. But should you keep investing? There are three reasons why we will continue to use cryptocurrencies in 2023, and one reason to avoid them for now.
Why Now Is A Smart Buying Opportunity
1. Price rock bottom
Bitcoin’s peak price was around $70,000 per token, while Ethereum was around $5,000 per token. Currently Bitcoin is just under $21,000 and Ethereum is around $1,500.
If you’ve been looking for a more affordable time to invest in cryptocurrencies, there may not be a better time than now. Currently, the cryptocurrency market is basically liquidating, and you can load up on quality investments at fractional prices.
2. Rise can be lucrative
Of course, no one knows if the crypto market will recover. However, such downturns are not necessarily uncommon in this industry, and major cryptocurrencies have suffered worse in the past.
For example, in 2018, the price of Ethereum fell nearly 95% year-on-year. Had he invested at the lowest point, he would have seen a return of nearly 4,500% over the next three years alone.
Again, it is unclear what the future holds for cryptocurrencies and we may not see another rally similar to the 2020-2021 surge. Even if you don’t go back to , investing at the lowest price can turn a profit even with a relatively small rise.
3. You may regret not investing
Cryptocurrencies are a speculative investment, so even experts don’t know what will happen in the long run. It can fail, but it can also change the world.
When deciding whether to invest, consider which of the following options you will regret more. Invest now and lose money if crypto fails, or don’t invest and miss out on a once-in-a-lifetime investment if crypto succeeds.
To be clear, this doesn’t mean you should go all in and invest every dollar you have in crypto.As with any investment, buy wisely and only as much as you can afford. Investing is important. But for some people, it’s worth betting a small amount of money to avoid the regret of missing this chance.
Why it’s best to avoid cryptocurrencies
1. You are a risk averse investor
Despite all the possibilities, cryptocurrencies also carry considerable risk. At this time, it is impossible to know whether cryptocurrencies will succeed and there is always the possibility of losing your investment. If money is tight, now may not be the time to buy.
Also, this investment is notorious for its extreme volatility. Even in good times, we can experience nauseating ups and downs. Not all investors are happy with cryptocurrencies, and that’s okay. If you know that level of volatility will keep you awake, you might be better off sticking with stocks for now.
The future of cryptocurrencies is uncertain and whether or not to invest now will largely depend on your risk tolerance and personal preferences. I can’t.
Katie Brockman has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin, Cardano, Ethereum, and Solana. The Motley Fool’s U.S. headquarters has a disclosure policy.