Cryptocurrency Investors: Now What?
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The cryptocurrency continues to fall for investors and remains a shock to those who have invested in the sector over the past few years. After making some people millions, it seems those same people lost as much in the recent crash.
So the question is, what now?
What happens now?
Cryptocurrencies like Bitcoin (CRYPTO:BTC) continue to rise and fall, but the declines seem to be happening more regularly. Bitcoin, for example, fell 88% from January to mid-July this year. And while Bitcoin then rebounded around 17% as the market started to climb, a small pullback in the market as a whole caused it to plunge again. Now, shares are up just 3% from mid-July to date.
The problem is that the reason for the drop remains unclear, besides the lingering fear of market uncertainty. It’s not like inflation or even rising interest rates really affect Bitcoin or other cryptocurrencies. Instead, it seems like it’s just too risky for investors to step back into this market full of slowing stocks.
Still, does that mean you should date forever? Or use this as an opportunity?
Of course it is. There are many factors when considering cryptocurrencies, but, of course, at the top of your list is your risk tolerance. If you’re retiring soon, it’s unlikely to be best for your wallet. On the other hand, even if you have decades to invest, it could be a bumpy ride with no certainty if you choose the wrong cryptocurrency.
And yet, many investors searched for the “next big thing” when crypto hit the market. Now we would like hope they know better. So it’s time to move on to companies that have a stronger future in a world filled with cryptocurrencies.
Because he will be be full of them, we just don’t know which ones. The United States government is working on a digital dollar, and this is in response to a digital yuan. This is in addition to privatized companies continuing to create opportunities for investors.
So where should investors who can withstand this highly risky environment turn?
There are many cryptocurrencies to consider and by far Bitcoin is probably your best bet. However, it is incredibly expensive. And that expense doesn’t mean it will be less volatile, it just means it will likely last when other cryptos fail.
Instead, I would look at companies that support the rise of cryptocurrencies. For that, Galaxy Digital Backgrounds (TSX:GLXY) looks like a great option. Galaxy stock is an asset management company, dedicated to getting cryptocurrency-related businesses off the ground. This includes blockchain companies, miners, and cryptocurrencies themselves. In fact, it even mines crypto itself.
Plus, Galaxy stock actually looks like a massive value play when you look at its fundamentals. It currently trades at just 5.57 times earnings and 0.28 times book value. And yet, stocks are down 69% year-to-date, following the same path as Bitcoin.
At the end of the line
Cryptocurrency remains an incredibly volatile place that only those willing to take high risks should consider. And even then, your strategy shouldn’t be “get rich and get out.” Instead, find quality companies that will rise higher and higher in this new digital age.
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