Should Bitcoin still be treated as a reliable long-term investment?

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Well into the year's first month, investors' sentiment regarding the cryptocurrency industry was in a much shinier spot.

The BTC price USD pushed back despite the many struggles witnessed for the better part of last year when important players on the financial stage failed and played out with more industries besides of digital currencies.

Bitcoin has broken its $3,000 level several times this year, again proving its well-known resilience. The upticks caused other crypto assets to rise, consequently contributing to the overall health of the industry and drawing more and more investors to the market. The heightened interest of investors was also reflected in regulators' increased willingness to come up with effective regulatory practices to protect purchasers. In addition to the bright future, the optimistic investor sentiment led to greater demand and lower supply.

Needless to say, Bitcoin hasn't managed to maintain that performance and dipped below the $3,000 level, leaving investors debating whether a long-term strategy will protect them from potential losses or whether they should dispose of their holdings ASAP to incur as minimal financial damages as possible. As numerous examples indicate, cryptocurrencies are mainly profitable when projecting into the future and not expecting to generate unimaginably fast and big money. Besides this, Bitcoin has demonstrated its potential to provide impressive gains for those who have patiently tackled it. How Bitcoin is further approached is a hotly debated topic in the crypto community and beyond.

 Investors are sticking with their BTC holdings despite the unfavorable environment

Cryptocurrencies are widely recognized as highly volatile assets whose values, reflected in prices, can climb and dip significantly without notice. Regardless, this exact fluctuating nature has financially rewarded many investors in the past and is a reason why many keep holding onto their crypto assets or exploring the industry's opportunities. They have demonstrated their capability to create revenue; historically, they have also outperformed stocks in terms of revenue potential. Despite how well-established and old the stock market is, the cryptocurrency industry has performed far better over a shorter period, given that the latter is still in its developmental stage.

Bitcoin is probably the best example to look to, being not only the first successful attempt to create cryptographic money but also maintaining its reigning position despite the many imitations and inventions that followed in its footsteps. To date, only Ethereum has managed to threaten Bitcoin's position, which gave life to the theory of the "flippening", or the moment Ethereum might overtake Bitcoin. However, these speculations are not founded. Bitcoin is undergoing upgrades, and the dev community is continuously working to strengthen its structure, so Ethereum is not the only technology making the headlines with its improvements.

To further emphasize the theory of Bitcoin, it's worth looking at its inception price. It was valued close to nothing when it broke into the market, being bought for less than $0.10 in 2011. However, over the following period, it garnered tech-savvy individuals' attention and hit an astonishing value of $68,000 in November 2021. Similarly, its cousin, Ethereum, was valued at less than $3 nine years ago. It achieved a remarkable value of $5,000, and chances are it will also behave better when the price of the leading crypto improves.

There are endless examples of how crypto made many investors rich. Still, the main lesson here is that patience and constantly improving knowledge about the sector are paramount when investing in crypto. These assets have attracted investors looking beyond the opportunities provided by the stock market, which has seen the S&P 500 rise by 55% over the past half of a decade.

Bearish tendencies translate to lower prices

Evidently, anyone wants to stumble across a profitable venture that involves the most minor investment possible. This is the recipe for quick and easy money, though this may not be as straightforward as it seems. Bitcoin challenges current holders or those considering putting their cash or savings into digital currency. For some, the significant unpredictability and fact that Bitcoin is so quickly impacted by a broad range of internal and external factors are unbearable.

However, it's worth noting that there's also a positive side to all the distress caused by the current financial situation. The bearish phase is mirrored in the bargain prices at which Bitcoin is offered, meaning that investors leveraging the affordability of Satoshis might be sitting on a golden mine sometime in the future. A whole Bitcoin is highly expensive and would cost an arm and a leg, but you acquire parts of Bitcoins, also known as BTCs. Therefore, when the whole depressing period is over, the aftermaths of the troubling political landscape are smoothed, and inflation lowers, there are chances that the crypto industry will subsequently perform better.

Until then, remember to only invest money you can afford to lose because nothing guarantees returns on investment, regardless of the myriad "expert" opinions on the internet. It takes time until the crypto market proves its resilience again, and if it does. Stick to the 5%-10% rule of investment and don't overspend on cryptocurrency, but also look to other industries.

Regulations are in sight

The crypto industry is highly unregulated in many parts of the world, with the UK serving as a good example. They're regarded as property and taxed as such, while every place offering crypto assets is scrutinized by the Financial Conduct Authority and the Bank of England. These two provide their own sets of guidance, recommendations, as well as warnings.

However, the scenario will likely change, given the prominent interest in the crypto market. The popularity garnered throughout the years makes regulatory bodies more interested in making changes in this respect and stabilizing the market so everyone can leverage more secure investments.

More organizations and institutions looking to explore Bitcoin, enable BTC transactions, or develop their own crypto projects or offerings have also contributed to the spike in appeal. These aren't matters that can be overlooked, so the regulatory system is expected to make the needed transformations and changes in favor of the regular crypto investor. Since the environment is constantly modifying, staying updated on any modifications that may arise is essential.

Final words

Most crypto investors approach Bitcoin with long-term objectives, for it has already demonstrated it can bounce back from the harshest of struggles. Like with any other purchase, investing in digital currencies requires a thorough understanding of the market and preparedness to stay unmoved by any unfavorable event that may arise and play out with the prices.

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