By Sabrina Loh
Bitcoin’s price has dived more than 50% from its November 2021 high of $69,000 per coin. At the time of writing, its price is $29,000.
Cryptocurrency is notorious for its volatility, and it swings more widely than any other market — this is evidenced by the fact that bitcoin climbed to $40,000 before falling to its current $29,000. And in 2021, its price fell below $30,000 before surging to November’s record high of $69,000.
With Bitcoin’s prices plummeting, you may be wondering if now’s a good time to buy.
Why is bitcoin dropping?
This week, we saw the collapse of Terra blockchain, its DeFi protocol Anchor and stablecoin UST. The Terra blockchain gained a lot of popularity in recent times and became a credible competitor to ETH.
There are many conspiracy theories surrounding the cause of Terra’s collapse, with some sources suggesting a coordinated "attack" from major New York main street funds. This was vehemently denied by said funds.
Whatever the reason, this caused panic in the crypto industry, sending bitcoin to its yearly low of <25000 USD/bitcoin.
Terra (LUNA) $0.0000050 (-99.98%) ( 1w ago : USD 110)
UST 0.08 usd (-82%) ( 1w ago: USD 1.00)
Anchor protocol USD 0.107 (-99%) ( 1w ago: USD 2.33)
Should you still buy bitcoin?
The underlying principles for buying Bitcoin still haven't changed — it’s widely accepted, easy to send and accept globally, and extremely scarce and valuable ‘digital gold’.
Bitcoin’s supply is capped at 21 million coins, and there are already 19 million bitcoin in circulation. As the demand for this asset and cryptocurrency continues to increase, we may see the value continuing to rise.
Therefore, many might think that buying bitcoin right now is not a bad idea, especially if you’re investing for the long-term.
If you do choose to proceed, read up on dollar-cost averaging first, a technique where you buy in smaller amounts at regular intervals.
The bottom line
It’s easy to get caught up in the hype, but don’t rush in just because it’s cheap. Crypto remains a high-risk investment and there is a chance that you may not make any returns, so make sure you do your research and only invest money that you can afford to lose.
We’ll leave you here with a glossary of terms in case you’ve seen these around and don't know what they mean:
GM: Good morning
NFA: Not financial advice
DYOR: Do your own research
WGMI: We’re all gonna make it
NGMI: Not gonna make it
Rekt : Well, this just means you're wrecked.
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