Connect with us

Stocks

Bitcoin Is Showing Signs of a Bottom

Bitcoin (BTC-USD) is operating in an environment of extreme fear. At the same time, it has shown signs of resilience and continues to gain utility. Your risk profile is paramount, but now might be a good time to establish a position. 
Tic…

Bitcoin (BTC-USD) is operating in an environment of extreme fear. At the same time, it has shown signs of resilience and continues to gain utility. Your risk profile is paramount, but now might be a good time to establish a position. 

Ticker
Company
Price
BTC-USD
Bitcoin USD
$31,312.19

Advertisement

Greater Fears Halted?

Not more than a few weeks ago, investors in Bitcoin were extremely fearful. That hasn’t exactly changed, with this Crypto Fear & Greed Index currently showing what it characterizes as extreme fear.  

  • 7 Oversold Value Stocks to Buy for June

But based on price action, there’s some reason to be optimistic. When I say optimistic, I mean optimistic that more extreme opinions are looking more and more unlikely. One such opinion is that of Guggenheim Investments chief investment officer Scott Minerd, who as recently as May 23 said that BTC could drop to $8k. It should be noted that Minerd claimed Bitcoin could go to $600,000 as recently as February 2021. 

The point I want to make about price action is simply that BTC briefly dipped below $28k and has remained higher for the last three weeks. That suggests that the worst may be over and grimmer prognostications, like that of Minerd, are overly pessimistic. 

Advertisement

Utility 

Anyway, guessing at the price of Bitcoin is a foolish pursuit. Its future trajectory hinges, to a large degree, on utility. 

The more places Bitcoin acts like cash or credit, the greater its chances of long-term success. Fortunately, there are approximately 3,000 new locations where Bitcoin will be accepted. That’s because Chipotle Mexican Grill (NYSE:CMG) will allow crypto payments through Flexa. Bitcoin features prominently among its payments and is a widely held cryptocurrency, so the news is a step in the right direction as pundits have long called for increased utility. 

Advertisement

Bitcoin is accepted by many businesses, including 14 major businesses. 

Advertisement

Better Than Altcoins

Well, what isn’t at this point? Investor confidence was shattered recently as Terra (LUNA-USD) crashed. It has since been undergoing a revival led by founder Do Kwon. But I think it’s fair to say that altcoins have lost a significant amount of appeal by this point. 

It’s hard to say what lessons were learned, though. Do Kwon is proving that his backers are behind him and capital is again flowing into his project. It seemed like simply claiming that something is pegged to the dollar would no longer suffice. Maybe it doesn’t matter. If backers will put their money into Terra, that may be all that matters because that capital drives everything. 

Advertisement

Anyway, what’s important to understand is that Bitcoin, although it suffered, didn’t suffer nearly as much. It appears to be much more stable than altcoins. It has separated itself as a digital asset, which remains important. 

What to Do with Bitcoin

I still think there is too much volatility to invest in Bitcoin at this point. However, I’m pretty conservative with money. For those who are less risk-averse, the fact that BTC looks to be staying above $30,000 is a strong sign. 

Advertisement

On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

More From InvestorPlace

  • Stock Prodigy Who Found NIO at $2… Says Buy THIS
  • It doesn’t matter if you have $500 in savings or $5 million. Do this now.
  • Get in Now on Tiny $3 ‘Forever Battery’ Stock

The post Bitcoin Is Showing Signs of a Bottom appeared first on InvestorPlace.

Advertisement

InvestorPlace| InvestorPlace

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *