Bitcoin's recent crash has caused concern about the volatile product, but experts believe that it is still trending upward.
The recent crashes in cryptocurrencies have more people interested in investing in the volatile market, but one expert says don't expect a quick return on your spending.
Bitcoin, one of the largest and most popular cryptocurrencies, has dropped in price in recent weeks. The latest $ 10,000 drop has been seen as a minor fluctuation for the currency.
The price drop has been attributed to a variety of factors, including the US Securities and Exchange Commission's rejection of a Bitcoin exchange-traded fund and China's crackdown on Bitcoin mining.
Finder's personal finance expert Kate Browne told news.com.au that the currencies are still on an upward trend.
โInvesting in cryptocurrencies has highs and lows, we often see the market fluctuate. For Bitcoin, it has gone from $ 89,000 to $ 79,000, โhe said.
โIn general, it still has an upward trend. It's worth noting that in 2015 a Bitcoin was worth more than $ 450. If you take that into consideration, the $ 10,000 drop is not a huge amount. "
Browne said those interested in cryptocurrencies should consider dollar cost averaging with their investments.
It is a popular strategy used to mitigate the risk of market volatility.
The scheme involves the purchase of a specified quantity of an asset at regular intervals, regardless of price or market conditions.
An example of this would be if you set up a recurring order that buys $ 100 worth of Bitcoin at the beginning of each month.
It comes as the Reserve Bank of Australia warned crypto investors that they are at risk of holding speculative assets with "niche" uses that could lose most of their value.
RBA head of payments Tony Richards said that the value of many cryptocurrencies, which have risen to $ 2.6 trillion, has been driven by "fads and fear of missing out" and could collapse when central banks decide to do so. assert control over your monetary systems.
"I think there are plausible scenarios where a variety of factors could come together to significantly challenge the current fervor for cryptocurrencies, so that current speculative demand can begin to reverse, and much of the price increases of the past few years could get rid, "he said. the Australian Corporate Treasury Association, according to AFR.
Cryptocurrencies have been notoriously volatile and analysts said it is too early to tell if the latest drop marks the beginning of a bullish market reversal or if it is just a correction on the way to new all-time highs.
