The May correction cooled the fervor of crypto investors. But is it possible to enter the crypt now? Delovoy Mir gathered the opinions of five experts on this matter.
On April 14, 2021, the most capitalized cryptocurrency – Bitcoin (BTC) – updated its absolute maximum value at $ 64,863 (according to the CoinMarketCap resource). As of June 7, the coin is trading at $ 36,000, which is 44% cheaper than the peak.
Against the background of the correction of the BTC rate, market participants disagreed in their forecasts for the further movement of the asset: some believe that Bitcoin will be able to continue to grow, others are confident that several years will pass before the next maximum update.
To understand the issue, we decided to talk to five experts about the prospects for the coin and whether it is worth investing in cryptocurrency in 2021. You can find out more details at https://sphere2222.com/.
Opinion number 1. Deep correction of bitcoin may enter a new phase of growth
- The expert believes that cryptocurrencies can become insurance against corrections in traditional markets.
- In his opinion, Bitcoin risks experiencing a deeper correction.
- In the long term, the expert sees opportunities for cryptocurrency growth to $ 145 thousand.
Chen Limin, Chief Financial Officer and Head of Trading, ICB Fund
The expert drew attention to the fact that cryptocurrencies in 2021 can act as insurance against corrections in traditional markets. At the same time, the expert believes that a drop in coin prices may await investors.
“In early summer, the technical picture of the cryptocurrency market indicates a high likelihood of continuation of the correction, which forces investors to be careful about the timing of the return to purchases,” said Chen Limin.
At the same time, the expert recalled that there have already been significant falls in the history of bitcoin. Despite the deep corrections, after the asset still renewed historical highs.
Chen Limin believes that this feature of the behavior of the new financial instrument (deep corrections followed by recovery and renewal of highs) made analysts at the investment bank Goldman Sachs pay attention to it. Recall that recently, specialists from a financial organization revised their point of view and recognized cryptocurrencies as an emerging asset class.
“Now the market consensus is emerging in favor of continuing the decline in the bitcoin rate to $ 23-30 thousand, where it may again become of interest to large investors who still prefer to increase the share of gold in their portfolios. There are few doubts about the long-term prospects of digital assets now. The reason is in distrust of the policies of the leading central banks, which, in order to save the economy in the era of a pandemic, turned on the “printing press” at an unprecedented speed, pushing the valuation of traditional financial assets to sky-high in historical retrospective, “- this forecast for the future behavior of BTC shared Chen Limin.
A look at Bitcoin’s long-term prospects
The expert drew attention to the fact that talk about the lack of bitcoin collateral is still relevant. At the same time, in his opinion, against the background of the approaching moment of the need to raise the key rate on the part of the leading central banks, the stability of the current prices for shares and bonds may be called into question.
During the same period, Chen Limin noted, the algorithmically programmed Bitcoin emission limited to 21 million coins will play in his favor. The cryptocurrency supply limit, in his opinion, makes it possible to call BTC a digital analogue of gold.
“Provided that the same funds that are now involved in investment products based on gold come to bitcoin, its value will rise to $ 145 thousand. And these are estimates not of crypto enthusiasts, but of Bloomberg analysts. A number of other cryptocurrencies, on the basis of which the contours of the blockchain economy are currently being created, can also recover their value. In particular, we are talking about services of decentralized finance, which in the future will undermine the business of traditional banks, ”- this is how the CFO and head of the department of trading operations of ICB Fund sees the long-term prospects of the crypto market.
Chen Limin also drew attention to the fact that a favorable moment for buying cryptocurrencies may come in the middle or at the end of summer. By this time, in his opinion, the effect of the opening of the leading economies of the world will fully manifest itself, thanks to the improvement of the epidemiological situation due to vaccination.
“This will lead to an active recovery of jobs and will threaten further inflation, to which central banks will be forced to respond. As a result, there is possible tension in traditional financial markets and preconditions for looking at cryptocurrencies that have reached attractive levels for buying, ”the expert is sure.
By this time (mid or late summer), the quotes of the traditional market, in his opinion, will finally cease to reflect the overestimated expectations regarding the timing of mass adoption of digital assets in the world, which were characteristic of the beginning of this year.
Opinion No. 2. The already proven effectiveness of BTC will support the movement of the cryptocurrency rate
- The expert believes that the coronavirus has strengthened the position of bitcoin in the market.
- In his opinion, the movement of the BTC rate will support the already proven efficiency of using cryptocurrency as a savings instrument.
- He believes that Bitcoin will be able to continue to grow throughout the year.
Bob Eastwood, DeFi Development Director of the ECOS Platform
The expert also began his forecast by remembering that Bitcoin has experienced many ups and downs since it appeared more than 10 years ago.
In 2017, the expert recalled, the BTC value record was recorded near the $ 20 thousand level. In the following years, bitcoin began to lose value. In the spring of 2020, the cryptocurrency dropped to $ 4 thousand, after which, a year later, its rate reached almost $ 65 thousand.
Bob Eastwood is confident that Bitcoin has become a valuable asset due to several factors. Here is some of them:
- Due to the difficulties faced by businesses in the coronavirus 2020, people are interested in finding an alternative way to protect their assets. Many of them have chosen Bitcoin.
The expert noted that according to various studies, there is a high probability that the world will face another global crisis – even more serious than in 2009. This, in his opinion, can lead to a collapse of the stock market, a decrease in the cost of fiat money and other problems: bankruptcies, an increase in bank interest and other difficulties. Amid the changes, the market will face a new wave of interest in cryptocurrencies.
- Bitcoin has already proven its worth as a savings asset. Investing in BTC, according to the expert, may be the right solution for protecting capital in the coming years.
“The whole world is still struggling with the problems caused by the pandemic and the isolation measures. In this respect, the market situation in many countries is no longer so stable. Nevertheless, many studies say that by the end of the year, the cost of bitcoin may exceed $ 100,000, ”noted Bob Eastwood.
The expert concluded his forecast with the observation that there is a significant difference between the bitcoin of the 2021 sample and the BTC of previous years. Earlier, when the asset did not have such a level of support, Bob Eastwood noted, the coin was more prone to sales. At the moment, the strengthened version of bitcoin, in his opinion, may continue to show growth.
Opinion # 3. Cryptozyme Is Close, But Ethereum’s Growth Is Even Closer
- The expert considers long-term investments to be the most efficient scheme of work.
- When choosing assets for investment, in his opinion, it is important to consider fundamental values. In particular, it is necessary to study the prospects for the development of the project.
- In his opinion, in the conditions of 2021, the second cryptocurrency in terms of capitalization, Ethereum, deserves attention.
Garry Stones, Founder, CEО Listing.Help
Garry Stones, in turn, drew attention to the fact that many analysts predict crypto winter. At the same time, he believes that today there are significant prospects for investors.
“Those who invested for a long term earned the most on cryptocurrency, so we recommend adhering to the same strategy so as not to worry about periods of recession,” Garry Stones explained his point of view.
The cryptocurrency market, in his opinion, is at an early stage of development: many technological solutions are still on the way of their implementation, and large companies are just starting to enter the market. The expert proposed to disclose this statement using the example of Ethereum (ETH).
He noted that over the past month, the price of the cryptocurrency has dropped by about 50%. Many analysts, according to his observations, began to predict further decline. At the same time, Garry Stones noted, no one can say for sure the price of ETH in a month or in a year.
At the same time, the expert is sure that fundamental underestimation of the company is much more important for investment. In this direction, in his opinion, ETH has three fundamental growth catalysts ahead:
- July 2021 – Implementation of the deflationary mechanism thanks to EIP-1559.
- Summer-Autumn 2021 – Deployment of second-tier scalability solutions.
- First quarter of 2022 – transition to PoS and emission reduction.
“As a result, DeFi solutions will become the cryptocurrency mainstream, the Ethereum network will scale, and ETH will receive a deflationary mechanism and optimization of fees – all over the next 9 months. Against this background, any short-term drawdowns become less important in front of the fundamental indicators of growth and development in the future, ”summed up Garry Stones.
Opinion No. 4. The movement of prices in the crypto market can be supported by institutions
- The expert is confident that the digital asset market is at an early stage of development.
- In his opinion, investors should be prepared for sharp jumps in the rate of cryptocurrencies, both up and down.
- The formation by the regulators of the countries of the legal framework for the new financial instrument, in his opinion, made the cryptocurrency more attractive than a few years earlier.
John Lushman, private investor and entrepreneur
John Lushman immediately warned that he considered it unprofessional to answer the question about the prospects for investing in cryptocurrency in 2021 unequivocally.
The expert noted that at the beginning of the year, Bitcoin and most cryptocurrencies showed the historically best result. Including, BTC has overtaken the largest IT corporations in terms of capitalization, having thrown a serious challenge to “die-hard” assets like gold. Ethereum and the Binance token exchange – Binance Coin (BNB), as noted by John Lushman, have also grown significantly in the fierce struggle for the leadership of their blockchains.
Despite this, the cryptocurrency market, according to the expert’s observations, remains extremely volatile. At the same time, the cryptoindustry, in his opinion, is still not fully formed.
“The price for one bitcoin can be as much as $ 100 thousand or $ 10 thousand. As with any volatile assets (cryptocurrencies are not the first and not the only ones here), it makes sense to always keep at least 30% of your funds in traditional money and respond to the market with purchases or sales. Buying such an asset with all available funds is betting on zero, ”John Lushman gave such advice to market participants.
In his opinion, unresolved regulatory issues add fuel to the fire. At the same time, over the past 4 years, according to the expert’s observations, many states have made serious progress in the formation of a legal framework for the digital asset market.
“This is largely why a series of purchases took place on the part of large investors and funds. If they are already there, then this is serious and for a long time, ”summed up his vision of the prospects for the further movement of the digital asset market John Lushman.
Opinion No. 5. Investing is worth it, but you need to focus on diversification
- The expert believes that the basis of successful investments is portfolio diversification.
- In her opinion, in the conditions of 2021, it is worth paying attention not only to the leaders of capitalization, but also to other, less popular tokens.
- She is confident that the return on investment in cryptocurrencies can be increased through DeFi.
Tatiana Maksimenko, official representative of the Garantex cryptocurrency exchange
Alex Olbry, the official representative of the Garantex cryptocurrency exchange, began her forecast with a remark that digital assets have already proven their viability and market demand.
“Every year, cryptocurrencies are attracting more and more attention from participants in the traditional financial market: retail investors and asset managers. In my opinion, now cryptocurrencies are an obligatory asset in any investment portfolio, even if it is focused on traditional financial instruments such as stocks, bonds and precious metals, ”the expert noted.
Despite the high volatility and risks associated with investing in cryptocurrencies, Alex is confident that competent diversification of their inclusion in the investment portfolio will improve investment performance indicators.
The expert believes that investing in cryptocurrencies should be done in the same way as in traditional assets:
- determine the share of coins in the total investment portfolio;
- examine and select suitable assets;
- buy additional coins in equal shares at regular intervals while maintaining a share in the portfolio.
“To start working with cryptocurrencies, I would advise you to operate with a small share, for example, 5%. If the investor has a high level of risk tolerance, then you can think about investing 10% or 20% in cryptocurrencies, “Tatiana Maksimenko shared such a” recipe “.
At the same time, all investments in cryptocurrencies, in her opinion, should be diversified. The expert is sure that market participants need to pay attention not only to the main and popular cryptocurrencies, such as Bitcoin or Ethereum, but also to other interesting assets. In particular, we are talking about tokens of centralized exchanges and decentralized trading platforms, as well as coins of DeFi platforms, non-fungible tokens (NFT) and tokens of NFT projects.
“DeFi projects can be used to increase profitability. And most importantly, it must be remembered that the crypto market is an area of increased dependence on emotions. Fud (fear, uncertainty and doubt) and fomo (loss of profit syndrome) reign here. Don’t let yourself fall prey to your own emotions. It is better to approach any investment carefully and with a cold heart, ”summed up the official representative of the Garantex cryptocurrency exchange.
Experts disagreed on the future of the digital asset market. At the same time, they believe that today various tools for making money are available to members of the crypto community.
Thus, in the conditions of 2021, despite the corrections implemented by bitcoin and a number of other cryptocurrencies, according to experts, investors still have the opportunity to profitably buy coins.