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Cryptocurrency

Answering the big Bitcoin question – buy, sell or hold?

Bitcoin is characterised by booms (when the price goes up) and busts (when the price falls) that have been sources of major criticism.

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Bitcoin users rise in Nigeria despite Senate, CBN campaign against it, Answering the big Bitcoin question - buy, sell or hold?, Bitcoin hits a 12-month low, Bitcoin price under pressure, stays under $7000, How to protect your bitcoin from hackers, Bitcoin Whales Gathering More Bitcoins, Waiting For the Bullish Run, Bitcoin is scarce, entities, individuals hold for long term

There’s no other way to say this – the price of Bitcoin is volatile. The world’s most popular cryptocurrency is characterised by booms (when the price goes up) and busts (when the price falls) that have been sources of major criticism. This volatility puts many West Africans off but it is also one of the main reasons why others invest in Bitcoin, hoping to buy when the price is low and cash-in when the price is high.

This may sound like a very simple and straightforward process if you are an experienced commodities trader. However, for many, it is anything but that. Working out when to buy and when to sell or hang on to Bitcoin can be a rather complicated process to navigate.

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Bitcoin users rise in Nigeria despite Senate, CBN campaign against it 

A pile of bitcoins

People in West Africa buy and sell Bitcoin for a variety of reasons. When the price of Bitcoin increases, some fear they are missing out on an opportunity to make a fortune. So they start buying Bitcoin, hoping the price will continue to rise.

On the other hand, fear, uncertainty and doubt (FUD), as well as price dips also prompt many to sell because they think the price may drop even further. So they sell their Bitcoin because they don’t want to lose what they’ve already invested. Whatever your reason for investing in Bitcoin, the question of whether and when to buy, sell or hold is one that must be addressed head on.

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Commit for the long term

One way to address this question is to be committed for the long-term. Committing to investing a set amount of money each month, for example, makes it easier for you to benefit from Bitcoin price averaging and limit the impact of volatility and market movements. This also means the amount of Bitcoin you acquire will vary from month to month. But, over time, you will average out and will not need to worry much about the so-called perfect time to buy or sell.

[READ MORE: Bitcoin users rise in Nigeria despite Senate, CBN campaign against it)

Bitcoin is sensitive to various factors

It is also worth bearing in mind that no boom or bust lasts forever. The price of Bitcoin, like any other asset class, is sensitive to a variety of factors, including the state of the global economy and statements from well-known business and tech personalities. One statement in favour of cryptocurrencies could send prices rocketing and a statement against could bring it back down.

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Much of the recent volatility, for example, has been a result of the negative sentiment across all markets caused by the global geopolitical news flow. These negative sentiments have also had an impact on all asset classes. With the current uncertainty surrounding global geopolitics, many investors have placed a small amount into Bitcoin as a hedge.

New asset classes can be volatile

It is important to remember that cryptocurrencies are still relatively new as an asset class, so there will always be a higher level of volatility compared with traditional and more established forms of trading. It is also important to remember that as the benefits (especially to developing markets that are disadvantaged by traditional financial services systems) become clearer, more people and businesses will hold the coins for their utility value. This will reduce speculation which should, in turn, reduce volatility. As more countries introduce regulation and the functionality of the coins increases, this should also positively impact the stability of the price of Bitcoin.

Answering the big Bitcoin question - buy, sell or hold?

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Whatever approach you take to investing in Bitcoin, the importance of responsible investing cannot be overstated. Don’t ever invest more than what you can afford to lose and don’t believe anyone who tells you they can guarantee returns – this is usually a scam.

Spend time understanding your personal preferences and the risks associated with your investment. Once this has been done and you’ve thoroughly researched crypto, you should be well-placed to take advantage of the opportunities presented by cryptocurrencies like Bitcoin.

 

devland

Owen Odia, Country Manager for Nigeria at Luno

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Patricia

Nairametrics frequently publishes articles from experts such as financial analysts, economists, researchers and investors. We also feature articles from guest writers and bloggers who wish to push their views and opinions through our platform. To get your articles on Nairametrics, kindly send an email to [email protected] and we will publish it within 24 hours of approval by our editorial team.

1 Comment

1 Comment

  1. alicejenifferze

    March 17, 2020 at 8:48 am

    Thanks for sharing! of course, bitcoin is sensitive to various factors. I think that the impact of coronavirus lets to the massive fluctuation in Crypto Market.

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Cryptocurrency

Tether mints 80,000,000 USDT to unknown wallets within 24 hours

Tether Treasury minted a whopping 80 million USDT in less than 24 hours.

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Tether expected to surpass Ethereum, based on strength of the U.S dollar, ther mints 80,000,000 USDT to unknown wallets within 24 hours

Tether, the world’s most valuable stable coin by market capitalization, has been gaining a lot of traction lately. The latest development is that Tether treasury minted a whopping 80 million USDT to unknown wallets in less than 24 hours, as seen on Whale Alert, an advanced blockchain tracker and analytics system.

Tether is ranked the 3rd largest cryptocurrency by market cap of $9.2 billion, with a daily volume of $22.8 billion as at the time this report was drafted.

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READ MORE: U.S regulator invites Banking and Crypto industry leaders for partnership

Quick fact: Tether is designed as a blockchain-based cryptocurrency whose digital coins in circulation are backed by the same value of traditional fiat currencies like the U.S dollar, Japanese Yen, or the Euro. It trades under the ticker symbol USDT.

Barely weeks ago, Bloomberg reports stated that the momentum with the help of the U.S dollar was expected to make Tether gain and move to the second spot.

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READ MORE: Fastest growing cryptocurrency, Compound (COMP) up over 143% in 24 hours

“Absent an unlikely reversal in predominant crypto trends, it should be a matter of time until Tether passes Ethereum to take the No. 2 spot in total assets behind Bitcoin. Receiving help from widespread adoption with a workable case as a proxy for the world’s reserve currency, there seems little to stop the increasing adoption of the dollar-linked stable coin,” the report stated.

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Cryptocurrency

Ripple payment now operational in U.S, 22 geopolitical regions

Ripple (XRP) plays dual roles as a payment platform and a currency.

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The infusion of Ripple by global banks has gained traction lately, as Spanish biggest bank by total asset and market capitalization, Santander, designed a Ripple enabled payment app called Pay FX that offers a borderless blockchain-based payment channel.

Santander recently just added 19 geopolitical regions to its One Pay FX international payments app offering in collaboration with blockchain and crypto payment powerhouse Ripple.

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Before now, the blockchain payment app was available only in Poland, Spain, Brazil, and the United Kingdom; One Pay FX now enables users from the world’s biggest economy, United States, and emerging markets that include Chile to sit among others on the list of added countries, totaling the number of countries on its offering to 22.

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Quick fact: Ripple (XRP) plays dual roles as a payment platform and a currency. It has an open-source platform that is created to allow quick and cheap transactions.

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Unlike its crypto rival, Bitcoin, which was never intended to be a simple payment system, Ripple has gained the attention of major global banks, like Standard Chartered, and Barclays for international transactions worldwide.

Customers told us that the international payments process could be better so we partnered with Ripple to explore how BTC could make transactions faster, cheaper and more transparent,” Ed Metzger, CTO of One Pay FX said in the statement.

READ ALSO: Uber expands food delivery business in a $2.65 billion acquisition 

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Metzger described feedback from customers, noting difficulties with transaction exchange rate clarity and timing confusion.

“Ripple helps us directly address the issues raised by our customers […] Whether they are putting down a deposit on a holiday rental or paying a foreign supplier, they see exactly how much will arrive when they’re making the payment and have certainty about when it will get there.”

What this means ; The Ripple enabled app will allows customers to see exactly how much will arrive when they’re making international payments, while the low-cost transactions happen instantly or on the same day, instead of the traditional 3-5 timeframe.

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Cryptocurrency

BTC whale moves 19,630 BTC valued at $185,000,000

BTC whales have shown historically that they often determine BTC trend.

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BTC whale steps in to buy larger stacks of Bitcoin, at a discount of $8,850 

BTC whales have been moving large stacks of BTCs lately, triggered by the recent bullish momentum in the BTC market.

According to data obtained from BTCBlockbot, a crypto analytic tracker, someone moved 19,630 BTC block 638,319 estimated to be roughly worth about $185 million dollars, less than 12 hours ago.

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In addition, BTCBlockbot suspected that the BTC whale probably came from Coinbase moving about 19,630 BTC ($185M) in block 638,316.

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Global investors and traders are now rushing into the BTC market as cheap money abounds, and inflation is on a record high. While it is difficult to predict market movements, BTC whales have shown historically that they often determine BTC trend.

READ ALSO: Over 900,000 active Bitcoin wallets push transactions to 3-year high 

Quick fact: At the BTC market, investors or traders who own large amounts of bitcoins are typically called Bitcoin whales. This means that a BTC whale would be an individual or business entity (with a single Bitcoin address) owning around 1000 Bitcoins or more.

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As BTC whales accumulate BTCs, bitcoin’s circulating supply reduces, and this can weaken any bearish trend bitcoin finds itself in. Meaning that over time, it’s possible that as BTC approaches its fixed supply of 21 million, the price of BTC will go up, with BTC’s present demand factored in.

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“The price of BTC is now more than 20x higher than it was when we first saw this many whales, implying that more wealth is being held by whales,” Glassnode noted.

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“However, the average balance held by each large holder has decreased during this period, such that whales actually hold less bitcoins now than in 2016, and less wealth (in USD terms) than in 2017,” it added.

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