Currently, there is an extreme fear in the cryptocurrency market. The CoinMarketCap Crypto Fear and Greed index is 19 years old (out of 100 possible), suggesting that many market players are ready to throw in the towel Bitcoin(Crypto: BTC).
But it would most likely be a mistake. A price close to $ 83,000 may seem heavy for a volatile digital asset for a period of extreme uncertainty of the market. However, Bitcoin is negotiated with a significant discount, against a summit of $ 109,000 less than two months ago. If history is a guide, it could be one of your latest opportunities to buy it at such a price.
Naturally, fear, uncertainty and current doubt (FUD) on prices, trade wars and a possible recession have many people on tents today. Add to the fact that someone you know could be dismissed from the United States government thanks to the government’s ministry of efficiency, and this can be frightening.
No wonder, then, that Bitcoin carriers are in force these days. According to a new report on the cryptography market of 10x Research, the Bitcoin price could drop up to $ 73,000 before it recovers. And a number of eminent crypto investors such as Arthur Hayes now suggest that it could even drop below $ 70,000.
But then what? It was almost the exact price to which Bitcoin exchanged the day of the ballot, so it simply means that we are back in November 2024 with.
We have gone through a period of extreme euphoria under the Trump administration, and now we live a period of extreme fear. They are “animal spirits” at work, and it probably has a direct impact on your daily humor – especially since if you have registered with Bitcoin price alerts on your phone.
Keep in mind: in the past 15 years, Bitcoin has always been able to reach decreases and major market cuts. According to Cathie Wood by Ark Invest, he experienced five separate periods in his history when she lost 77% or more of her value. And each time, he bounced better than before to reach a new summit of all time.
During the four -year period you want to choose, Bitcoin was one of the most efficient assets in the world. In fact, in the decade from 2011 to 2021, it was THE A highest efficient asset in the world, and it was not even close. Crypto was also the most efficient asset class in the world last year, led by Bitcoin prices more than doubling.
From this point of view, the current slowdown in Bitcoin is not as disastrous as some suggest. Past performance does not guarantee future results, of course, but the historic file of the digital part should give you a little comfort at the moment.
Better still, Bitcoin has two solid catalysts. The first of them is an increased institutional adoption. This simply means that major institutional investors – including investment companies, Wall Street banks, pension funds and sovereign wealth funds – are now investing.
Image source: Getty Images.
According to Global CoinbaseMore than 1,000 major institutional investors (those who have more than $ 100 million assets under management) have now bought Bitcoin via new ETF Bitcoin. And according to the latest deposits 13F with the Securities and Exchange Commission, the amount invested therein by these institutional investors is greater than $ 38 billion, against only $ 12 billion in the previous quarter.
The second big catalyst is the recent announcement of the new Bitcoin strategic reserve, which will hold the supply of the US government of the digital part. Admittedly, the deployment of the reserve in March was disappointing for many, since it has not officially committed the government to buy bitcoin on the free market.
However, the White House left the door open to future purchases, as long as purchases can be made in a “neutral budgetary” manner. In short, if the government can find a way to buy Bitcoin without using taxpayer funds, it will. The options include the evolution of the budgets of other asset classes, such as the gold reserve or the titles.
The original concept of the Bitcoin strategic reserve called on the US government to buy 200,000 pieces per year for the next five years, so this purchase – if it materializes – could be massive. In fact, Michael Saylor, founder and executive president of Strategy (The company formerly known as microstrategy), now calls on the government to buy 25% of all bitcoins in circulation by 2035.
With current market volatility, it is difficult to predict where Bitcoin will end the year. But according to online prediction markets such as Polymarket, it is probably lower than expected. Bitcoin is now about 30% chance of reaching $ 150,000 this year, and only 17% chance of reaching $ 200,000. And if you expect it to reach $ 1 million in 2025, well, there are only 3% chance that this happens, according to the Polymarket survey.
This is why you really have to adopt a long -term approach to Bitcoin. The crypto has finally bypassed the dominant current and is now experiencing a wave of institutional adoption. It is increasingly integrated into the global financial system and now has the support of the US government at the highest level. For me, it’s a green light to load on Bitcoin at the moment.
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Dominic Basulto has positions in Bitcoin. The Motley Fool has positions and recommends Bitcoin. The Motley Fool has a policy of disclosure.
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