What's happening to Bitcoin?
It's that time again!
Time for our bi-weekly(ish) check in with the first born child of the crypto space: Bitcoin.
Right now, across most markets, risk aversion is the name of the game - and investors are pulling their money out of the markets, while things remain choppy.
This collective transfer of funds, from 'risk on' assets (e.g. tech stocks & crypto) to 'risk off' holdings (e.g. cash), saw Bitcoin fall back below $20,000 on Tuesday.
But obsessing over week-to-week price movements is tiring and doesn't really paint a larger picture...
So where're we at when we zoom out?
Think of it like this:
Let's say you're looking to buy your first home, but you're not quite ready to pull the trigger.
Maybe you want to wait till the end of the year, to see what kind of raise you get - maybe you want to pad out your rainy day fund first?
Point is - you want to have a little more certainty, before you start spending.
That's where the Bitcoin market is at right now: in search of a little more certainty.
(Hell, it's where most markets are at).
In the long term, most people in the crypto space see Bitcoin as a solid investment.
...but right now, they're not thinking in terms of decades, they're thinking in terms of months.
When will inflation start to taper off? If it doesn't soon, what will the next 12 months be like? (Probably bad).
If Gross Domestic Product (GDP) is negative again for this quarter, we'll officially be in a recession...how long will that last?
None of these questions (or their potential answers) are the kind that inspire investors to take on risk - especially in an asset as volatile as Bitcoin.
So for now, it looks like folks are happy to stay holding their cash, while they wait for a little more certainty.
In the ever lasting words of our mothers:
Patience is a virtue.
