Crypto prices have pulled back from recent highs over the last week. Bitcoin is trading around $18,000. Ethereum is around $548. Smaller altcoins on the whole have pulled back sharply.
This is completely normal action during a bull market. A larger pullback wouldn’t surprise me either. Crypto markets are still young and volatile. I think this kind of cycle will be the case for years to come.
Bitcoin is the possible exception here. It appears to be maturing and stabilizing more quickly compared to most altcoins. I believe the continued move of institutional investors into BTC will further reduce volatility. Many of the big firms buying bitcoin today will likely hold it for 10 years or more. And that should really help improve stability.
Of course, we’ll still get pullbacks. But going forward I expect them to be smaller and less dramatic for bitcoin.
I’d be cautious buying the dip in most altcoins at this time. But I do think this might be a nice opportunity to get into Haven Protocol (XHV) — one of our portfolio coins for a few years now. It’s had a fantastic year. And it’s still a tiny coin with a market cap of around $33 million. Needless to say, it’s a high risk privacy coin — but it’s also a potentially high reward one with some very unique features.
If you’re currently building a position in bitcoin, now would be a nice time to start dipping your toe in the water. I continue to believe we’ll see bitcoin reach at least $40,000 in the next year or so. The primary risk here in the short-term continues to be that we get a major stock market correction — which could leak over into crypto markets. However, the Federal Reserve and Treasury Department are doing everything they can to prevent that. And I also expect a large stimulus package in the near future. So I think the crypto markets will be just fine.