Crypto currencies like Bitcoin, Dogecoin, Ethereum in free fall; how will it impact investors?
Crytocurrencies are the favoured choice of new and millennial investors, however it is too risky an asset to deal with and may wipe out your money on any given day. Therefore, experts suggest caution and restrained investment.
New Delhi: As is said about crypto currencies, they are highly volatile and can land you in troubled waters. This is what happened today. All digital currencies went into a tailspin today, with key technical driving down in red.
Popular cryptocurrencies like Bitcoin, Etherium and DogeCoin have seen free fall in last 24 hours.
Bitcoin plunges more than 50% from its April level
Bitcoin, the most popular and sought after crytpocurrency in the world lost about 30% to $31,000. This happened after billionaire Elon Musk blocking Tesla booking with this currency. The rout wiped $500 billion from Bitcoin’s peak market value. The coin is now down more than 50% from its record level of $65,000 posted in April.
China banning financial payment institutions from using crytocurrency for payments also contributed to sharp fall in Bitcoin value.
DogeCoin drops to Rs 21
DogeCoin, the crytocurrency which seems to have emerged as one of the hot favourites of Tesla also plummeted sharply and was down to Rs 21 this evening.
Shibu Inu coin, the recently launched crytocurrency in India, also witnessed sharp drop by 48%. It current value is reportedly said to be Rs 0.000710.
Another digital currency Etherium was trading at Rs 1.8 lakh on cryptocurrency platforms.
The drop in prices of these popular coins may seem dramatic but considering the high volatility of crypto assets, it should not come as a surprise.
What the free fall means for investors
Crytocurrencies are the favoured choice of new and millennial investors, however it is too risky an asset to deal with and may wipe out your money on any given day. Therefore, experts suggest caution and restrained investment.
Avinash Shekhar, Co-CEO of ZebPay speaking on the bloodbath in crytocurrency market said, “nearly 40 per cent dip in the bitcoin price from its all-time high looks dramatic but is normal in many volatile markets, including crypto, especially after such a large rally.”
I don’t understand this asset class.
It excites and enthrals, and then on a single tweet, it falls. pic.twitter.com/0uNWqM9eGN
— Radhika Gupta (@iRadhikaGupta) May 19, 2021
“Such corrections are mainly due to short-term traders taking profits. He said that for the long-term value investors, the falling prices might serve as a buying opportunity,” a leading portal quoted Shekhar.
“Investors should invest in education first. Research the underlying value of Bitcoin, Ethereum, and other crypto-assets as you might look at a company’s information before buying stocks. Use strategies like rupee cost averaging and SIPs to more confidently manoeuvre through volatility and take a long-term view,” he added.
One must not invest one’s savings or emergency funds in crytocurrency – is the cardinal advice of most experts.