About 2 months have passed Bitcoin (CRYPTO: BTC) When Ethereum (Cryptography: ETH)..
Both cryptocurrencies have been downhill since reaching record highs in November. Bitcoin has fallen by more than 36% since its peak, and Ethereum has fallen by nearly 30% from its all-time high.
Some things that could help this recent sale, such as the news that the Federal Reserve could raise interest rates in the coming months and the recent Internet shutdown in Kazakhstan, a major Bitcoin mining country. There are factors.
This significant drop may be a concern, but keep in mind that in some cases, a price drop is a wise opportunity to invest at a more affordable price.
Bitcoin and Ethereum are the two most expensive cryptocurrencies, priced at around $ 41,700 per token and $ 3,200 per token, respectively. However, these cryptocurrencies are basically currently in clearance, compared to their highest ever prices of $ 70,000 per token and close to $ 4,900.
Does that mean you need to stock up on Bitcoin and Ethereum while they are on sale? necessarily. Here’s what you need to know:
Are Bitcoin and Ethereum good investments?
When prices fall during a market recession, you may want to put a strain on your investment just because it is more affordable. But before you buy, it’s important to make sure they are the right investment for you.
Like all cryptocurrencies, Bitcoin and Ethereum are still speculative-that is, no one knows how they will work in the long run. That said, both have powerful advantages that can help you succeed over time.
Bitcoin, for example, is designed as a store of value and an inflation hedge. There is still no jury on how effective Bitcoin is in hedging inflation, but as inflation continues to skyrocket, more investors are expecting Bitcoin as a long-term investment. El Salvador has even become fiat currency and continues to gain traction as a payment method.
Ethereum is also ready to grow further in 2022 as it moves to the Ethereum 2.0 upgrade. This makes the network faster, more energy efficient, and more affordable.This update not only facilitates Ethereum scaling, but also helps catch up with young competitors such as: Cardano When Solana..
Need to invest now?
Whether you invest in Bitcoin or Ethereum depends largely on your risk tolerance. This recent slump may seem alarming, but these cryptocurrencies aren’t the worst we’ve seen over the years. For example, Bitcoin has lost more than 80% of its value in the past, and Ethereum prices plummeted by nearly 95% throughout 2018.
Such volatility has become the standard for cryptography. Bitcoin and Ethereum have a good chance of surviving this recession, but if you choose to invest, be prepared for further turmoil. If you’re a risk-averse investor, consider whether you’re happy with this level of volatility.
Also, when investing, keep in mind that it is best to keep investing for as long as possible. In other words, don’t expect to buy now and sell in the weeks to get immediate profit. Invest only if you plan to continue investing for at least a few years, if not decades.
Like all investments, Bitcoin and Ethereum have their strengths and weaknesses and are not suitable for everyone. If you can tolerate higher levels of risk and are willing to hold your investment in the long run despite volatility, they may be suitable for you. If not, you may be better off waiting now.
This article represents the opinion of a writer who may disagree with the “official” recommendation position of the Motley Fool Premium Advisory Service. We are miscellaneous! Asking investment papers (even our own) helps us all think critically about investment and make decisions that help us become smarter, happier, and richer. It will help.