Is It the Best Time to Buy Cryptocurrencies?

Does the cryptocurrency market offer the perfect entry point? Cryptocurrency market cap is trading at the lowest level since October 2017; meaning that the coins have lost all the gains that they had generated during the last year bull-run.

Source:coinmarketcap.com

Bitcoin price is down close to 80% from its all-time high; the largest coin has hit 14 months low of $4100 this week. Its market cap traded below $75 billion for the first time since fiscal 2017. Altcoins, on the other hand, are feeling more pressure on their price performance. The majority of altcoins are hovering around the lowest level since May 2017 – many of them are trading 90% below their all-time high that they achieved at the end of fiscal 2017.

Bitcoin (BTC) Price Today – BTC / USD

Name Price24H (%)
Bitcoin (BTC)
$11,781.65
3.07%
Ethereum (ETH)
$377.50
1.00%
XRP (XRP)
$0.247711
2.98%
Bitcoin Cash (BCH)
$247.91
0.81%
Litecoin (LTC)
$48.06
2.45%
Bitcoin Gold (BTG)
$7.83
1.67%

The Selloff was Surprising

The latest selloff in cryptocurrency prices is quite surprising for some investors. The markets were stable over the past two months, and the traders have been experiencing positive reports related to institutional investments.

Goldman Sachs announced to offer crypto trading and custodian services to their clients while Fidelity also expressed its enthusiasm about cryptocurrency markets. ICE subsidiary Bakkt has also announced to launch bitcoin futures on its exchange – which many analysts believe would increase the inflow of institutional investments.

Traders and analysts blame bitcoin cash hard fork for the latest crash in cryptocurrency prices. Some traders have also been blaming the bearish trend in U.S. stock markets and the global economic environment for a selloff. The U.S. markets plummeted sharply in the last two months; Dow Jones and S&P 500 are in a negative tertiary year to date.

Is it a Buying Opportunity?

Tom Lee, the Wall Street strategist and Bitcoin bull, expects crypto markets to bounce back in the days to come.  He claims that downtrend in the cryptocurrency market is due to the specific event instead of fundamental factors.

However, he is optimistic about the bull-run in the final quarter of this year. Explaining his stance, he said, “The next wave of adoption is institutional. There is a crossover happening. This is just an awkward transition. Institutional backing will come soon. You will get it partly through infrastructure, like Bakkt, which is launching soon.”

He expects Bitcoin price to stand around $15000 by the end of this year. His price prediction is based on mining breakeven price concept; the analyst says BTC mining breakeven cost stand around $7000 level while BTC has the potential to trade two times higher than its break-even level.

“Bitcoin has historically traded 2.5 times its mining cost, so it’s not out of the question that it could be $20,000 by the end of the year,” he added.

It’s quite difficult to predict where BTC price will move in the future. Tom is certainly right about the prospects for institutional investors with the launch of platforms like Bakkt. Therefore, investors are suggested to keep a close eye on cryptocurrency markets before making any investment.

 

 

 

 

 

 

 

 

 

Disclaimer: The information on this site is provided for discussion purposes only, and should not be misconstrued as investment advice. Under no circumstances does this information represent a recommendation to buy or sell securities.
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Based in Saudi Arabia, Siraj has a strong understanding of and passion for stock and cryptocurrency markets. He has worked for international clients for many years on several projects related to the stock market, equity research and other business, accounting and finance related projects. Siraj is a published financial analyst on the world's leading websites including SeekingAlpha, TheStreet, MSN, and others. Siraj is Crypto Editor at TheOofy.com.