News + Blog


Why Should I Buy Crypto When Prices Have Dropped?


After months of prolonged international turbulences and post-pandemic economic repercussions, the June market fall occurred after the most recent inflation data revealed persistently high consumer prices, and the Federal Reserve increased its benchmark interest rate by 75 basis points, the highest rise in over three decades. Since then, the crypto market lost almost $2 trillion, while the S&P slipped into a bear market.  Now, the leading cryptocurrency is down about 70% from its all-time high, although Bitcoin has already recovered from more severe declines.


Bitcoin, the dominant cryptocurrency, is presently selling for less than $20,000, down 35% year-to-date and as much as 71% from its all-time high of around $69,000 in November of last year. Now, it seems that buying the dip is on the mind of most crypto aficionados, and we’ll explore the main reasons why this happens.


Looking Forward to the Development of the Crypto Market


In recent months, the values of Bitcoin, Ethereum, and other cryptocurrencies have fallen in tandem with the stock market as individuals cope with growing inflation, Russia’s assault on Ukraine, rising interest rates, and recession worries.


For young individuals with the longest planning horizons for retirement, the current market dip could present an opportunity. According toJurrien Timmer, director of global macro at Fidelity Investments, Bitcoin’s fair market value is presently between $40,000 and $50,000 and might reach up to $100,000 in two years. Moreover,Chris Brendler, managing director and senior market analyst at D.A. Davidson anticipates that the price of Bitcoin will go to around $38,000 by the end of this year and $50,000 by the end of 2023.


If the past is prologue, the present dip (or collapse, depending on your point of view) might recover as it did last year, when prices dropped to comparable levels before rebounding to pre-dip levels and even peaking in the fall, as consumers wanted their piece of the pie.


Particularly, Bitcoin prices have shown a degree of seasonality so far, falling to a smaller or larger amount in the spring before rebounding in early summer. As with any kind of financial endeavor, and especially in the volatile realm of cryptocurrencies, previous performance is not indicative of future outcomes. In the last five years, market fluctuations have been so extreme that it is difficult to forecast how or when the market will recover.


Exploring Solid Fundamentals in the Blockchain Realm


During a “crypto winter” such as the one we are seeing so far this summer, many believe that tokens with solid fundamentals have the greatest chance of surviving. As the crypto winter  grows colder, on-chain indicators show  that Bitcoin whales’ trust has not diminished.


In the last crypto winter, Bitcoin peaked at about $18,000 in December 2017 before plunging to around $3,400 the following December, a peak-to-trough decrease of roughly 80%. This seems similar  to Bitcoin’s current 70% slide from its all-time high. Less than three years later, in November 2021, when Bitcoin reached its all-time high of $68,721, some of those who  held their Bitcoins saw their assets increase by a factor of twenty.


 In recent years, we've seen an increase in institutional interest in Bitcoin and crypto assets in general, which is indicative of the asset class’s further maturation and acceptance. Furthermore, a recent survey by Glassnode revealed that long-term Bitcoin buyers remain unfazed by the cryptocurrency’s recent decline. So far, they have taken advantage of the chance to acquire Bitcoin from weak, overleveraged short-term traders who were “forced” to sell amid the turbulence. In the same vein, novel data from IntoTheBlock suggests that this cohort has continued to collect coins at low prices despite falling costs.


So, Why Would You Buy the Dip?


Cryptocurrency price fluctuations are perplexing at the best of times, let alone when the market is approaching unknown territory, increasing the amount of risk for traders contemplating purchasing the dip. However, many may opt to buy the crypto dip after assessing their risk tolerance and prioritizing other aspects of their finances, such as saving for an emergency and paying off high-interest debt. 

For those willing to discover the prospects offered by the crypto realm, Bitcoin Depot is one of the most straightforward methods to purchase  Bitcoin, with 7,000 crypto ATMs in the US and Canada. Many of those locations are in venues open 24/7 and offer convenient parking. For those wondering “Well, where can I find a Bitcoin ATM near me”, Bitcoin Depot’s ATMs arelistedonline, enabling everyone to find a Bitcoin ATM closest to them. Plus, Bitcoin Depot recently launched BDCheckout.  This service allows those that download the Bitcoin Depot mobile app to load their cash on the app, head to a participating retailer to pay at the cash register with cash, and receive cryptocurrency on their digital wallet.

July 11, 2022