Bitcoin recorded gains of over 100% this year when it set a new all-time-high around $65,000 and altcoins, such as ETH had even bigger gains before the market tanked majorly in May 2021. Now as the market appears to be recovering, investors may wonder whether we are going to see another similar rally or is it too late to invest in Bitcoin and crypto.
Is it too late to invest in Bitcoin or crypto? The short answer to that question is no. Here are some reasons why:
- Institutional interest in BTC remains high
Despite the crash in May, institutions have not dropped the ball on BTC. In fact, major players like Elon Musk, Jack Dorsey and Michael Saylor have continued to back the market leader. Even major banking institutions such Goldman Sachs, Morgan Stanley and more recently, Citigroup, have shown interest in trading crypto-based instruments and servicing a growing clientele interested in crypto exposure.
- ETH 2.0 is still more than a year away
ETH 2.0 is considered to be a major upgrade and has the potential to catapult the space to the next level by providing the necessary tools and environment for developers to create and run truly decentralized protocols the likes of which have powered the DeFi space so far.
With this update more than a year away, market participants have more than enough time to find suitable investment opportunities before a potential paradigm shift in sentiment.
- Regulations are unclear but on the way
Regulations, though considered against the spirit of the crypto space, are necessary for it to gain widespread adoption and acceptance. The recent chatter around crypto-related laws and regulations has shown a growing willingness among law and policymakers to tackle the issues pragmatically and there are voices supporting the space. Crypto is no longer in imminent danger of being outright banned or outlawed, and that in itself bodes well for the future.
- Volatility is still alive and kicking
One of the main reasons for investing in crypto is its potential for massive gains in short periods of time. Compared to traditional markets, crypto is known for its volatility, which is also a sign of its lack of saturation.
Despite this year’s rally and an influx of new investors and traders, the market, including Bitcoin, has continued to show a lot of volatility. For instance, after rising more than 100% between January and April, BTC dropped 56% between May and June and is now up over 75% since June’s low. This volatility, especially the pullbacks, give investors more opportunities to take better positions.
- Crypto companies are just getting started
After Coinbase’s successful listing it should come as no surprise that other crypto and blockchain companies are also working towards higher valuations. For instance, this week we saw Blockstream, a blockchain and Bitcoin tech solutions company, raising $200+ million in funding at a $3.2 billion valuation.
As more of these companies emerge, investors have opportunities to both, directly and indirectly benefit from crypto investments. The crypto space and these companies will ultimately form a correlation, where the growth and success of one will automatically fuel the other.