In the last two weeks, the values of cryptocurrencies have plummeted and then recovered in these days. While falling prices can lead investors to worry, they can also provide excellent buying opportunities. This is especially true for higher priced assets, which can be made more accessible by buying during a slump. When the market is in free fall, it might seem like it’s the best time to buy cryptocurrencies.
But is it advisable to invest right now? Here’s all there is to know about it.
When is the best time to buy cryptocurrencies
In principle, it makes sense to buy investments while they are cheaper and then sell them when they reach their peak . This, however, is much more complicated than it looks. It is extremely difficult to determine the timing of the market, and it is much more difficult with cryptocurrencies because these assets are significantly more volatile than typical stocks.
Cryptocurrency values have been on a wild roller coaster, making it virtually difficult to choose the best time to buy. If you buy now because prices seem to have bottomed out, there is a risk that they will go much lower, and you will have bought too soon. However, if you wait too long, prices could go up and you miss the chance. This is why traders use software tools as the divergence indicator to make valid trading decisions. Cryptocurrencies, like stocks, don’t have a track record, so no one knows if these currencies will be able to recover from their crashes.
Major cryptocurrencies, such as bitcoin , have so far recovered from the crashes. However, there are no guarantees that these investments will continue to thrive, and there is a possibility that cryptocurrencies as a whole could collapse. If you buy at a low price with the expectation of it going up, you could be setting yourself up for a disappointment if bitcoin fails.
The best time for you
When should you buy cryptocurrencies if you are interested in doing so? The fact is that it doesn’t really matter, as long as you proceed strategically. C omprare good long-term investments and keep them is the key to making money in the stock market. If they are truly solid investments, they should appreciate their value over time, and their prices should go up as well.
With bitcoin, the same logic applies. It doesn’t matter if you buy when bitcoin is $ 60,000 or $ 30,000 a token, if you believe cryptocurrencies have a bright future and will transform the world. You will get a nice profit even if it reaches, for example, $ 500,000 per token. Of course, no one can guarantee that bitcoin or any other cryptocurrency will be successful. However, if you are going to invest, you should do so because you believe in the relative future and are ready to hold your money for years, if not decades. If you are simply investing to make a quick buck, you are playing a risky game, and you will most likely lose more money than you will make.
Using the dollar-cost averaging method (PAC ) to decrease price volatility is another option. Dollar-cost averaging is when you invest a certain amount of money on a regular basis, like $ 1,000 every quarter or $ 300 every month.
When prices are high, it can be tempting to buy. However, you will be investing when prices are lower. These ups and downs should average over time. This can help mitigate the impact of market volatility on your assets, and you won’t have to worry about the timing of your purchases. Regardless of when you decide to invest, keep a long-term perspective in mind . Nobody knows if cryptocurrencies will be successful or not, but if they do, you can increase your profits by investing for the long term.
This Is What Jack Dorsey’s Cryptic ‘705742’ Tweet Might Mean
A simple but cryptic tweet from Jack Dorsey, Founder and CEO of Twitter and payments firm Square, has sparked a debate about the meaning of the post, and whether the well-known Bitcoin (BTC) advocate has any BTC-related plans that have yet to be announced.
As pointed out by many users replying to the thread, the tweet, saying just “705742,” likely refers to a block number on the Bitcoin blockchain. A block with that number was indeed mined on Tuesday at 20:14 UTC, but it is still unknown what else is special about the particular block.
Been updating block explorer for the last 7 minutes— Katie The Russian (@KatieTheRussian) October 19, 2021
Twitter users were quick to pull up the bitcoin block explorer to see if there was anything unusual about block 705742, which at that point had yet to be mined. However, little out of the ordinary could be found.
Others, meanwhile, joked that the number could be Dorsey’s “[end of year] price target for bitcoin,” or that it could be somehow related to “Moscow time,” – bitcoin slang for the value of 1 USD in satoshis.
Speculating further, one user on Reddit suggested that the block number could be the first block to be mined by a new mining system that Dorsey has proposed.
“Maybe the first block that Square mined as part of their [research & development] for a potential public mining platform,” the user wrote, before adding that it looks like the wallet that received the block reward already has both in and outbound transactions worth almost USD 2bn. “Seems like a plausible volume for Square/Cashapp,” the user added.
However, according to various Bitcoin blockchain explorers, the block in question included 2,787 transactions and was actually mined by the BTC.com pool. Moreover, the block was mined almost an hour after the tweet was published.
In either case, as reported, the latest tweet from the Twitter CEO followed another thread from last Friday, where Dorsey said that Square is considering building “a bitcoin mining system based on custom silicon and open source.”
“Mining needs to be more distributed” and it “should be as easy as plugging a rig into a power source,” Dorsey wrote, asking his followers what the biggest barriers are for people who want to run miners.
Facebook Finally Launches Digital Currency Wallet Novi but Senators Want to Close This Project
Amid the Facebook Novi launch, some federal legislators want the social media giant to discontinue the project.
Facebook Inc (NASDAQ: FB) has launched the pilot phase of its digital currency wallet Novi in the US and Guatemala using stablecoin Paxos. Facebook finally launches Novi and is going with Paxos’ USDP after its own native crypto Diem failed to secure regulatory approval. Furthermore, the social media giant heralded the pilot launch in a blog post on Tuesday.
Novi’s pilot launch is more than two years after it was first announced. The wallet will facilitate fast, secure, and free fund transfers between users via mobile smartphone apps. However, all users must register with government-issued identification.
For now, Paxos’ stablecoin will serve as Novi’s transactional currency, while powerhouse exchange Coinbase will provide custodial services. According to David Marcus, head of Facebook’s Novi wallet, this pilot phase will, “test core feature functions, and operational capabilities in customer care and compliance.” Furthermore, it will test the viability of stablecoins as a valid and sustainable form of payment.
Facebook Launches Novi to the Disapproval of US Congress
Amid the Facebook Novi launch, some federal legislators are calling for the social media giant to discontinue the project. Senate Democrats addressed a letter to Facebook CEO Mark Zuckerberg on Tuesday questioning the company’s credibility with crypto. In their own words, Facebook “cannot be trusted to manage cryptocurrency”. The senators base this conviction on the social media company’s past inadequacies in handling cyber risks and keeping consumers protected. Signed by Senators Brian Schatz, Sherrod Brown, Elizabeth Warren, and others, the letter read:
“Facebook is once again pursuing digital currency plans on an aggressive timeline and has already launched a pilot for a payments infrastructure network, even though these plans are incompatible with the actual financial regulatory landscape — not only for Diem specifically, but also for stablecoins in general.”
Part of the Congress letter to Facebook further states:
“We urge you to immediately discontinue your Novi pilot and to commit that you will not bring Diem to market.”
Facebook responded to the Senators’ query through a spokesperson for Novi, suggesting that the company would address the issues raised therein.
Facebook Has a Long-Running History with Federal Lawmakers over Its Operational Practices
In recent times, Zuckerberg and Facebook have locked horns more frequently with Congress. Back in 2019, Congress summoned the Facebook CEO to provide testimony on the Diem project (then called Libra). Zuckerberg’s summoning was the culmination of weeks of tussling, between Facebook and the federal lawmakers, who were skeptical of the project. In addition, the Zuckerberg hearing came just a year after Facebook’s Cambridge Analytica scandal. This may have been another reason federal legislators were agitated against the company.
Another recent red flag raised against Facebook was earlier this month from whistleblower Frances Haugen. Haugen appeared before the Senate Commerce Committee to testify on the threat Facebook posed to users. Some of these include the usage of Facebook itself and other affiliated services, such as photo and video-sharing behemoth Instagram.
Australian Parliamentary Committee Sets Guidelines to Give Crypto Industry a Big Push
Australia’s parliamentary committee on crypto-assets aims to bring concrete regulatory and policy changes to give a major push to the crypto industry in the country. The committee believes Australia needs a robust policy and regulatory changes to help it compete against the global leaders. The said committee released a draft report on 20th October outlining the need for encouraging investors and ensuring protection against frauds.
Some of the key recommendations in the draft report include,
- Establishing a market licensing regime for Digital Currency Exchanges, including capital adequacy, auditing, and responsible person tests under the Treasury portfolio
- Establishing a custody or depository regime for digital assets with minimum standards under the Treasury portfolio
- Conducting a token mapping exercise to determine the best way to characterize the various types of digital asset tokens in Australia
Andrew Bragg, a senator from the conservative Liberal Party and chair of the committee said that the recommendations in the draft would help Australia set a new regulatory framework for the highly popular crypto industry which will, in turn, help Australia compete against the likes of Singapore and UK. He said,
“The draft recommendations are a big push to detail a cryptocurrency framework for Australia, which would allow us to compete with the U.K. and Singapore,”
Crypto Market Has Become Too Big to Ignore
The Crypto market was primarily seen as a speculative ecosystem for the most past of its life, but that perception has changed quite fast over the past year. Governments have now realized that the crypto market has become too big to ignore as a fad. This is why the likes of El Salvador have made Bitcoin a legal tender, while Paraguay passed a law to legalize the use of Bitcoin and Ethereum in the financial market.
The United States’s policymakers who were adamant about keeping the crypto market at bay have finally approved the first-ever Bitcoin Futures ETF. This shows how the sentiment around the crypto market has changed as it became a $2.5 trillion industry again in October.