You may have heard that Bitcoin (and crypto in general) has been on a bit of a roller coaster lately. In just the last year, the price of one Bitcoin has gone from about $9,100, to spring highs over $62,000, to today’s prices in the $33,000 range.
Some of this is normal, or as normal as things get in crypto land. Stocks tanked in early 2020 before rebounding in historic fashion, driving BTC returns at the same time. And crypto started to hit the public consciousness in a big way, introducing new investors to the asset class who were eager to jump on the train.
(The recent Dogecoin hype is a good example of of this in action.)
But then there was this tweet last week…
“Look for more declines in crypto as bitcoin breaks through support. Next likely support level is $20,000.” — Scott Minerd, chief investment officer of Guggenheim Partners
He followed it up with this line on CNBC: “The real bottom (for BTC), when you look at the technicals, $10,000 would be the real bottom. You know, that’s probably a little extreme, so I would say $15,000.”
But, remember, this is the same guy who also believes that Bitcoin could also reach $600,000 someday. “If you consider the supply of bitcoin relative … to the supply of gold in the world … If bitcoin were to go to those kinds of numbers. You’ll be talking about $400K to $600K per bitcoin.”
What are investors to make of this?
Volatility is the name of the game.
First of all, don’t kid yourself. Bitcoin is by definition highly volatile. It’s going to jump around a lot because it’s the kind of asset and its popular amongst traders.
That said, it has started to calm down a little bit and test what technical traders refer to as levels of support. $30,000 is one and it’s been hovering in this area for a little while now as a result. But $10,000 was a support too for a long time, so there’s no guarantee that it won’t be going back there at some point.
But the bigger lesson when it comes to crypto is to ignore the short-term volatilty. If you believe that BTC will be higher in 2030 than it is right now, as many people do, you’re good. Ignore the chatter and focus on the big picture.