Bitcoin price has taken a massive plunge on May 10, dropping below $30,000 for the first time since July 2021. The world’s oldest and most valued cryptocurrency has now slid by more than 55 percent from its record high late last year. The overall global crypto market has also taken a hit, seeing a drop of 13 percent. The market cap hovered around $1.37 trillion, its lowest in 2022. Industry experts, however, remain hopeful that this trend is short-term and suggest that investors shouldn’t go into panic mode just yet.
In November 2021, Bitcoin touched its all-time high of $69,000. On Tuesday, however, BTC price stood at $31,559.20 at the time of writing, as per CoinDesk. Bitcoin price in India, as per CoinSwitch, stood at Rs 25.8 lakhs. Following suit, other cryptocurrencies have also seen a double-digit percentage drop. Ethereum registered a slide of 10 percent, Cardano saw a dip of 20 percent, Solana registered a loss of 16 percent, and Binance Coin slid 16 percent, among others, as per a report by Decrypt.
Good time to buy the dip?
Industry experts remain hopeful that this downward trend is temporary and advise investors to buy the dip with a bit of caution.
Unocoin CEO and Co-Founder Sathvik Vishwanath told ABP Live, “The trend may be short-term. We are seeing many who are averaging their positions so it may not be a bad time to get into the cryptos.” Unocoin is one of India’s earliest entrants into the Bitcoin space.
As per digital innovation and strategy consulting firm [x]cube Labs’ Vice President of Marketing Nilesh Jahagirdar, while the sudden plunge might be worrying for some investors, it’s “something the industry has seen before.” Jahagirdar told ABP Live, “The downward trend would probably continue for a bit before recovering. Whether it will get as high as November's $69,000 is up for debate.”
“For those looking to invest at this time, we would advise caution. Maybe invest a fraction of what was initially intended and monitor the market closely to invest more when it shows signs of recovery,” Jahargirdar said.
What caused the BTC price plunge? When will it stabilise?
Mudrex CEO and Co-Founder Edul Patel suggests that BTC’s downward trend could be attributed to several factors, including the current geopolitical tensions and the hike in interest rates. Patel told ABP Live, “Currently, BTC is at risk of breaking below its year-long price range. The coming days would be crucial for the entire crypto spectrum.”
Patel added, “The current market dip can be a good opportunity for the high-risk appetite investors to DCA. For less-risk appetite investors, it is good to observe the market movements closely rather than jumping into impulsive buying activity.” Mudrex is a Y Combinator-backed platform for automated crypto trading.
Hyper-deflationary token and NFT marketplace MetaOneVerse’s Chief Marketing Officer Abhay Sharma also believes that the rising interest rates and the ongoing Ukraine-Russia crisis have created a “risk-off environment.” Sharma told ABP Live, “The decline can be attributed to nervousness over the US Federal Reserve's determination to tackle inflation. The Fed last week announced an interest rate increase of 50 basis points, followed by a similar move by the Indian government.”
Sharma said that Bitcoin will start to stabilise “when the bloodbath on Wall Street ends.” He added, “We can expect more volatility in coming weeks due to global crisis and fear of recession. The long-term fundamentals remain in place for Bitcoin and it is indeed a good time to invest in cryptocurrencies, but a return to record highs will take a long time.”
So, for now, instead of going into panic buying/selling, investors are largely advised to cautiously watch the trends and buy the dip as the overall market is said to improve in the coming time.