Bitcoin Crash Has Created An Amazing Buying Opportunity
“Buy the dip.” “Buy the dip.” “Buy the dip.” It seems like most articles in 2018 have all been telling traders to buy the dip. And traders that have done just that have likely paid a very dear price. But capitulation probably isn’t the best strategy either. Instead, the best option is (and always has been) to create a game plan and stick to it. For me, that means buying as much Bitcoin (BTC) as I can get my hands on, so to speak. I believe in the future of Bitcoin. Here are 4 reasons why I’m buying.
Reason #1: Approaching My Original Investment Point
Many of you probably entered the cryptocurrency market before I did. I didn’t buy BTC until August 2017 at a price of around 3,000. When I bought BTC for the first time, I never imagined the wild ride it would take over the next 14 months. But I believed in it then and I still believe in it. I never thought I’d have another opportunity to buy BTC close to my original investment point. But now that it has fallen below 4,000, I will certainly be adding to my position when possible.
Reason #2: Bitcoin Cash Hard Fork
I don’t think it’s much of a coincidence that BTC’s collapse occurred at roughly the same time as the Bitcoin Cash (BCH) hard fork. Traders need to remember that BTC is not BCH. BCH emerged from a Bitcoin hard fork back in August 2017. But the two are no longer related. BTC has absolutely nothing to do with BCH anymore.
There are a lot of marketers and fraudsters who are trying to prop up BCH at the expense of BTC, but traders shouldn’t fall for those tactics. BTC is the leader of the cryptocurrency industry and will always be the leader.
The bottom line is that the BCH hard fork is likely confusing a lot of people in the crypto space. But I’m not confused at all. This BTC fall will not last, certainly not over the long-term.
Reason #3: Bitcoin ETF
Up until this point, the SEC seems unwilling to approve a Bitcoin ETF. In July, the SEC rejected a second attempt by the Winklevoss twins to list the first-ever cryptocurrency ETF on an exchange. There have been many other rejections as well. The SEC cites issues with security, market manipulation and investor protection as the primary reasons why it hasn’t yet approved an ETF.
But an ETF is coming. It might happen in 2019 but it will almost certainly happen by 2020. This industry is still in its infancy and needs to work through a few issues. But with the BTC futures listing earlier in the year, this industry has gotten too big to fail. Too many people have an interest in seeing this succeed. Once an ETF is approved, I fully expect BTC to soar like an eagle once again.
Reason #4: Enter Bakkt
In August 2018, Bakkt’s parent company Intercontinental Exchange announced that it would “create an open and regulated, global ecosystem for digital assets.” The company has already received the support of major businesses such as BCG, Microsoft, and Starbucks. This support and backing will certainly do wonders for attracting institutional support.
Although the plan was to go live in November, the company just released a statement delaying the launch until January 2019. Some traders believe that the Bakkt launch is already priced in. I do not believe that for one second.
Although Bitcoin has had an extremely rough last few weeks, the future is still as bright as ever. The current situation provides an incredible buying opportunity for new traders. Traders who have been around for a while also have an opportunity to average down.
One piece of advice I would give is not to use all your FIAT to buy now. Instead, save some bullets in case BTC drops even further.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.