Is Now a Good Time to Buy Cryptocurrencies?

Cryptocurrencies have continued to fall in the last few months owing to a sell-off that prompted investors to look for safe havens. Geopolitical tensions and a downfall in the US market ahead of the Fed tightening policy have led to cryptocurrency fall. Investors are shunning risky assets driven by rising yields, inflation concerns, and tightening monetary policy. The crypto industry lost about $1 trillion in market capitalization value. Even crypto giants like Bitcoin and Ethereum felt the jolt. The shutdown of Kazakhstan’s internet, having a fast-growing cryptocurrency mining is also hurting the digital coin’s valuation.

Does this downfall mean investors can buy on the dip? Experts say that crypto market behavior is influenced to a large extent by the financial market. The stock market got a hit from fears over the rate hike by the US Fed. It is a no-brainer that the fundamentals of cryptocurrency remain strong with huge investments in the Metaverse and large companies indulging in crypto mining industry. Instagram is planning to integrate NFTs while Twitter is rolling out NFT verifications. Note, NFTs or non-fungible tokens are unique digital tokens to properties, stored on a blockchain ledger. Digital real estate is expected to become a hot commodity in the near future and cryptocurrencies are being used for transacting in the digital world. NFTs are purchased using a cryptocurrency held in a digital wallet. For instance, most metaverse cryptocurrencies are built on the Ethereum blockchain eg., SAND and MANA which are the largest metaverse cryptocurrencies. Also, read How Cryptocurrency Trading Robots Work

Though cryptocurrency has registered a mammoth fall, bulls argue that people could buy more now, if it fits their long-term financial goals (10 years or more), given its huge potential for future growth. Investors should expect that volatility will continue for cryptocurrencies and these are suitable for risk-takers.  However, just do not buy for the sake of buying at lower valuations. Analysts at Goldman Sachs expect bitcoin to take market share from gold as it becomes an increasingly integrated and accepted form of payment.