Two Bitcoin Investing Strategies to Make Money in a Bearish Cycle, According to an Expert

Key facts:
  • The economist highlights that bitcoin is resisting runs that are showing strength.

  • He maintains his optimistic view of the future, although he does not recommend investing in BTC in the short term.

With Bitcoin (BTC) trading at $20,000 after a seven-month downtrend, it is difficult for investors to turn a profit. Given this scenario, Argentine Economist and CEO of Cryptogranjas, Jose Sarasola, revealed to CriptoNoticias his view of the cryptocurrency market and what two investment strategies he recommends.

“We see the movie wrong. Everyone talks about it Cryptocrash And the fall of bitcoin, but it’s not about how low it will fall, but how resistant it is. Because Bitcoin is effectively navigating a “perfect storm” with remarkable skill,” he said.

The economist points out Bitcoin He lost his $30,000 floor and went down to $20,000, but the news isn’t how much it fell, but “why the hell did it fall a little?”«. The amazing thing, he warns, is that no bank can resist the race, not even the most solvent, but he appreciates that BTC is succeeding.

The bear market that BTC is experiencing reflects that people are selling their money in cryptocurrency, including the large holders. However, the specialist notes that in this round, where many investors and small savers sell their bitcoins, the opposite is happening at the same time.

As a sales counterpart, this stands out There is another set of big and small investors who are benefiting from this downturn buy bitcoin. Above all, millennials who understand that this technology is the money of the future, and as they grow and gain purchasing power, they are earning more BTC.

«This group of people, who are more and more aware that bitcoin is here to stay. They don’t think of dollars, they think of bitcoins. That’s why they don’t care whether the price of BTC goes down or up. They see your virtual wallet and only care about how many bitcoins you have, not how many dollars that bitcoin is worth.«.

Jose Sarasola, Economist and CEO of Cryptogranjas.

A woman puts bitcoins in her eyes.
Saragossa makes it clear that bitcoin believers don’t care how many dollars it is worth. Source: Jose Saragossa.

In addition, she claims that in this context, more and more companies are adopting BTC as a means of payment, exchange and a form of savings. Likewise, he comments that the common people, who come neither from the investment world nor from the stock exchange, Turn to “believers“Bitcoin because they believe in its core concepts. This, he asserts, makes her “strong”.

Is it the right time to buy bitcoin or not? Sarasula’s responses

The economist estimates that The future of Bitcoin is a “sunshine” and many investors see this storm as a great opportunity to buy cheap. “Keep in mind that only two years ago BTC was trading at less than $4,000. Today we are very far from that number (at $20,000) because the community has grown.”

“But beware, we do not recommend that short-term investors acquire bitcoins,” he warns. The reason is that although she insists her future is promising and its fundamentals are as strong as ever, It may take several months for the bitcoin price to rise.

That’s why he confirms it Those investing in bitcoin at this time should be prepared to weather this storm. It also indicates that the biggest financial crisis in history lasted 25 months, while the downtrend of Bitcoin started seven months ago.

“for everything alcohol market (downward cycle) followed by a bull market (upward cycle). For this reason, when the numbers stabilize in the international context and running bullBitcoin will resume its upward trajectory.” It is called, You predict that the price of BTC will rise once the global macroeconomic and political context stabilizes.

This is also the opinion of the famous analyst of goods Mike McGlone, who said this week that bitcoin would be one of the assets that would benefit most from this scenario. It considers that the economic financial situation for the year 2022 is similar to the financial situation for the year 2022 broke down The year 1929 is said to be the worst stock market crash in history.

What should you invest in in the midst of a bitcoin bear market?

As a specialist in economics and cryptography, Sarasula mentions that One way to reduce risk, for those who aren’t sure to go in now, is to invest in it Mining. “Because the price of miners has gone down dramatically, which is a way to participate in the digital economy by reducing risk,” he says.

It states that if the price of bitcoin goes up, down, or remains stable, The machine generates income. As long as the cost of energy and overheads are less than profits He said the machine is generating.

“That is why, in Argentina, where energy is cheap compared to the rest of the world, mining is a way to invest in bitcoin, reducing exposure to its fluctuations,” he says of mining.

Also, it is considered buy bitcoin Maintaining long term is also a good strategy because it is estimated that its price will grow in the future. Although it is necessary to note that his bullish forecast is speculative, it is not guaranteed. Therefore, it is essential not to invest more than one can afford, while anticipating the risks.

These Are the Reasons for Bitcoin’s Fall, According to Sarasola

Jose Sarasola explains it Bitcoin’s fall is due to a number of factors. First, the global economic crisis, which has so far lasted seven months alcohol market It was exacerbated by the war with Ukraine, which generated political instability. Second, the interest rate hike by the Federal Reserve, which for the first time in 20 years is experiencing an increase.

Bitcoin has fallen for seven months since November 2021. Source: TradingView.

“In a world of political instability and rising rates, large funds logically change risky investments into safe investments,” he asserts. For this, it indicates that it was added in third place that many bitcoin holders were highly leveraged, unable to bear the decline.

Expectations of a continued rally resulting from the uptrend during 2021 have caused a large number of investors to borrow money to buy bitcoins. But this type of loan generates volatility, because once the price drops to a certain level, investors have to sell their bitcoins to repay the loan. That is, they do not sell them out of suspicion of currency, but because they are financially obligated.

Jose Sarasola, Economist and CEO of Cryptogranjas.

Entrepreneur confirms this, in this The context of political instability, raising interest rates and strong leverageIn addition, two specific events occurred that affected the crypto world:

On the other hand, the collapse of LUNA, one of the top 10 digital currencies, drove the rest, including bitcoin, which had nothing to do with it. On the other hand, the fact that some exchanges could not withstand the rise, because they did not grow strongly, and had to prevent their users from extracting money. This was the case for Celsius and for a shorter period Binance.

To understand the implications, it is as if in Argentina, in the context of political instability and a rising dollar, some banks are applying a coralito like that from 2001, to prevent their clients from withdrawing their savings. We all know what happened in 2001, it goes without saying. Chaos, panic, running, cacerolazos.

Jose Sarasola, Economist and CEO of Cryptogranjas.

Thus it is concluded that The deluge that caused panic in the cryptocurrency world has begun leading to massive sales. However, it is estimated that once the international economic and political context stabilizes and the upward trend of the markets in general begins, the price of Bitcoin will rise.

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