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10 months ago
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ARTICLE AD BOX
Pic credits : ForbesIn the realm of cryptocurrencies, Bitcoin stands as a dominant force, recognized by countless investors in the crypto sphere. As the largest digital currency globally, it has maintained a consistent valuation, hovering between $29,000 and $30,000 throughout the current year, following a tumultuous period in 2022. Investors are optimistic about the future, anticipating Bitcoin’s resurgence to surpass the $60,000 mark, driven by a robust macroeconomy and favorable inflation data.
For a comprehensive analysis of the coin’s prospects, Forbes Advisor India has crafted a guide that navigates whether investors should exercise caution or foster optimism when BTC was trading at half of its peak value at the beginning of the year. Presently, the cryptocurrency landscape tells a different story, with BTC showcasing resilience and trading at $42,936 as of December 20. Let’s delve deeper into the current dynamics.
How is Bitcoin Performing?
The cryptocurrency landscape witnessed a rollercoaster ride in 2023, particularly for Bitcoin (BTC). Beginning the year in January with a humble valuation of $16,000, BTC reached its zenith in July, hitting $31,000 and propelling the market capitalization to approximately 607 billion. However, the journey has taken a positive turn as of December 20, 2023, with BTC now standing at around $42,936 and boasting a market capitalization of $838.58 billion.
Challenges arose as stubborn inflation and turbulent macroeconomic conditions, notably in the U.S. and the UK, caused BTC to dip below the $26,000 mark. The U.S. Federal Reserve’s decision to increase interest rates to 5.5% and Fed Chairman Jerome Powell’s commitment to persist in the fight against inflation until rates reach 2% have added further pressure. The unfolding details on inflation might keep BTC under scrutiny.
Despite these challenges, a faction of crypto investors remains optimistic, considering the setbacks as temporary. They anticipate positive trends for BTC in the coming days, especially with the much-anticipated “halving” event on the horizon. This event, reducing BTC mining rewards by half, holds the potential to fuel Bitcoin’s upward momentum.
Bitcoin Price Movement (One-Month Data)
As of December 20, 2023:
Source: CoinMarketCapPost the last year’s deadly November crash, when BTC was hovering around in the range of $16,000-$18,000 levels, it has now rallied nearly 80%; but is still on the flip side. BTC is still almost trading 50% less in value since it reached its all-time high at $69,000 in November 2021.
Here’s how BTC’s current price has slumped from its high point over the past one year:
Examining the recent trends, Bitcoin reached a pivotal point at $31,000, experiencing a dip in September but subsequently recovering in October, November, and December. As of December 20, the current trading value stands at $42,809. Analysts posit that a sustained upward movement from this position could endure, suggesting the potential for BTC to recover losses and potentially surpass $35,000. This optimistic outlook is contingent on the establishment of robust resistance around the $30,500 mark.
In the past few months, Bitcoin has navigated through fluctuations, notably facing a significant downturn. Adding to the challenges, June of this year witnessed legal action by the U.S. Securities and Exchange Commission against prominent crypto exchanges, Binance and Coinbase. The accusations revolved around allegations of securities evasion and mishandling of consumer funds, further contributing to the cryptocurrency’s volatile trajectory.
Why Does Bitcoin Fluctuate?
BTC embarked on 2022 with optimistic prospects but encountered a downturn by the year’s end. The cryptocurrency faced a series of unfortunate events and hurdles, causing its value to plummet from $50,000 to $15,000 over the course of the year.
The broader cryptocurrency market experienced fluctuations, mirroring the challenges encountered by Bitcoin. These fluctuations were attributed to unforeseen macroeconomic challenges and recent disruptions in the U.S. banking system. Several factors contributed to the oscillation in BTC prices, including:
- Aftermath of the Russia-Ukraine war
- Instability in the U.S. banking system
- Concerns about inflation in developed countries
- Escalating interest rates in the U.S. and UK
- Rigorous tax regulations in India
- The collapse of the largest crypto exchange, FTX
These diverse factors collectively influenced Bitcoin’s prices, resulting in a volatile trajectory throughout the year. Additionally, they played a significant role in confounding investor sentiments.
Tips To Consider Before Investing In Bitcoin
Engaging in cryptocurrency investments holds significant allure, especially when considering the prominent digital currency, Bitcoin. However, prudence dictates the consideration of several key tips before venturing into Bitcoin investment.
- Allocate a prudent portion of your overall portfolio, ideally between 5% to 10%, to Bitcoin.
- Adopt a long-term perspective when treating your cryptocurrencies as an investment.
- Conduct a thorough analysis of Bitcoin’s market volatility before making investment decisions.
- Maximize your returns by diligently researching and identifying optimal times to buy and sell Bitcoin.
Given Bitcoin’s inherent instability and volatility, concerns about its safety as an investment choice are natural. It’s crucial to recognize that BTC’s value is primarily speculative, lacking the regulatory oversight seen in traditional investments such as mutual funds or equities. Seeking guidance from a financial advisor is recommended, as they can provide tailored insights to align your cryptocurrency investments with your specific financial goals.
Steps On How To Buy Bitcoin In India?
After gaining a solid grasp and some understanding of cryptocurrency, and feeling prepared to invest in BTC\, the next step is to comprehend how to purchase Bitcoin in India:
Step 1: Choose your preferred cryptocurrency exchange and create a free account, accessible through either their web portal or a dedicated application.
Step 2: Complete the registration process and undergo identity verification on the platform.
Step 3: Locate the “BUY” tab, which presents a variety of cryptocurrencies. Click on the link associated with Bitcoin.
Step 4: Initiate the purchase of Bitcoin through the provided link, opting for a payment method such as credit or debit card, net banking, or adding funds in the form of INR.
Step 5: Upon completing the payment and acquiring Bitcoin, it will be stored either in your exchange account or personal digital wallet. You retain the flexibility to sell it at your discretion or engage in trading for other cryptocurrencies. Additionally, you can stake it to generate passive income.
Bottom Line
Venturing into Bitcoin investment, particularly from an Indian perspective, presents nuances due to the Indian government’s proactive stance in regulating the crypto market and discouraging extensive involvement. If you remain unfazed by regulatory challenges and harbor an inclination to explore Bitcoin as an investment option, it’s crucial not to allocate your entire life savings and ensure a well-diversified portfolio. Conducting meticulous research and actively monitoring cryptocurrency markets globally can prove instrumental in maintaining a hedged position and navigating the complexities of this dynamic investment landscape.
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