It’s a scary time to think about something, especially cryptocurrency like Bitcoin, as markets could be shaking at the edge of a disaster or in a recession due to concerns about the economy that could be leaning towards a recession. (Cryptography: BTC).
It’s quite possible that all dollars are investing in the market right now may be a bit unworthy for quite some time. And, especially if there is a sharper recession than expected, investors may find themselves short of cash to cover costs if they overcommit to a single investment.
Nevertheless, I am still willing to buy a Bitcoin hand with my fist. Even if there is a bear market, or if the economic headwinds are already growing rapidly, I don’t think that will change. I feel good about my strategy here, so let me explain why it probably works.
As you’ve probably heard, the overall point of Bitcoin is that, in contrast to Fiat currency, it is an asset that no one can issue any more. I’ve also heard that bitcoin becomes more difficult to mine over time. It means something that will become an asset that will be an easy asset to continue buying regardless of your economic situation.
First, the rare mechanism of Bitcoin means there is a great incentive to buy it today, not next year. In the future, production is difficult, so when you go buy it, you will compete with the small amount of new coins that will appear in the market. If there is a major recession today, we won’t change anything about these basic factors, but we could potentially lower prices in the near future. However, if you are investing over a long period, the prices for a particular day or quarter are less important than the chances that the price will be significantly higher if you plan to sell in a future year.
And whether it’s caused by tariffs, war, mismanagement, etc., there’s nothing about the recession that makes it easier to produce Bitcoin. Bitcoin mining operations are spreading all over the world, so even if one country is experiencing dysfunction, miners will still be able to keep the chain alive elsewhere. And if there is disruption in miners, it only slows supply growth even further.
Second, many of the concerns surrounding current risk assets are related to the onset of new tariffs on Bitcoin in the US. It is not a medium of exchange for trade payments. The mining hardware tariffs simply mean mining elsewhere, so there is no threat to the network itself.
Therefore, there is no direct risk to its value in the short or long term. So, as long as there are evangelists who are willing to buy it at any price on a coin, like me, considering the supply dynamics, there is probably a lasting level of demand if you slowly raise the price over the long term.
I know the points above and know that the Bitcoin time horizon is to hold it for 20 or 30 years, so there’s not much reason to stop regular scheduled purchases. Bitcoin is not easy to make, and in a big scheme of things, the major holders will continue to accumulate it to supply from the market. Today’s prices are a distraction.
As bullish as I use Bitcoin, the same is not true for altcoins at this point, including those I cherish as Solana. There’s no need to hurry up and stop investing in them completely, but you need to be even more careful than you did just a few weeks ago.
In short, the largest altcoins in the cryptocurrency sector are not necessarily very isolated from economic slump. It’s easy to be more risky than Bitcoin, as it’s more risky than Bitcoin and isn’t overall established. However, it is during turbulence that additional risk exposures can cause real problems for investors and potentially create problems that do not explode when economic conditions improve.
It’s not that the top altcoin core investment papers are suddenly invalidated or sold as a result of economic instability or tariffs. Many of them rely on the quality of their (usually very dangerous) projects to continue to attract new capital to project and invest their blockchain ecosystem, so their recovery is not guaranteed at all.
Those ecosystems begin to shrink when investors lose their nerves during a dangerous period and start to run short of investment dollars allocated to risky plays. For them to recover, new projects, possibly in the newly emerging growth segment, need to fire and find traction. That’s much more difficult to do in an unstable economic environment.
I am still a buyer of certain altcoins. You may be there too. However, when it comes to choosing between Altcoins and Bitcoin, it makes more sense for now to lean towards a slightly safer, long-term play. This may not be correct for the risky options to be provided and it may not be true that the environment will happen for some time.
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Alex Kalchidi has positions in Bitcoin and Solana. Motley Fool has been working and recommending Bitcoin and Solana. Motley Fools have a disclosure policy.
This one cryptocurrency is the only thing I’m planning to buy my hand with my fist now.
