| Hi Taylor
- I know people are avoiding crypto like the plague right now,
but do you think there will be an upswing? Like, is this the time
Hi Ashton - When you hit rock bottom, the only place to go is
up, right? That's the thinking some people have after a brutal 2022
for the crypto markets, though I'm not entirely convinced that's how
the digital currency trade will work. When we try to apply conventional
wisdom to something as unconventional as cryptocurrency, things get
a little muddy.
what's happening. Before we decide prices have to go back
up, you need to think about why they fell in the first place.
There are a lot of external factors, like inflation, a lingering
pandemic, the war in Ukraine, etc. There were also rate hikes
in the U.S. and a borderline economic disaster in the U.K. Even
though crypto is perceived as the alternative to traditional finance,
it still trends pretty closely with the stock market because people
are using the same money to invest in Bitcoin as they are their
IRAs and 401(k)s. However, on top of that, we saw how hot crypto
was running to start out the year, even though it was still mostly
speculative. There were like three Super Bowl commercials for
different crypto trading sites, some of which have since declared
bankruptcy. Essentially, crypto and NFTs got a little too big
too fast, and now people are coming to terms with that.
2. Consider solutions. With rate hikes slowing down, there's
renewed life in the markets. This will improve cash flow and a
lot of that money will find its way back into crypto. Personally,
I think the next surge, assuming there is one, will be very telling
as to which parts of the blockchain are here to stay and which
investments are paper tigers. Lots and lots of money has been
lost on those so-called meme stocks and coins, so more people
will likely be wary of that happening again. The smart money will
go into the coins attached to greater projects and developments.
People want more than just an invisible coin with a price tagthey
want to see at least some identifiable value.
3. Priorities. Crypto has been a huge wealth generator, but
when times get tough, people turn to the things they trustcommodities,
safe stocks, real estate, and the like. People are facing lots
of hardships around the world, so crypto has taken a backseat
to savings and safer investing. In the short term, I don't see
a huge shift in that approach.
| Don't give
up on crypto, but don't bet the farm on an eminent comeback just yet.
Let's see where interest rates and inflation go before we get back
on the Bitcoin train. Good luck, Ashton!
Information presented is for educational purposes only and is not
an offer or solicitation for the sale or purchase of any specific
securities, investments, or investment strategies. Investments involve
risk and, unless otherwise stated, are not guaranteed. Be sure to
first consult with a qualified financial adviser and/or tax professional
before implementing any strategy discussed herein. To submit a question
to be answered in this column, please send it via email to Question@GoFarWithKovar.com,
or via USPS to Taylor Kovar, 415 S 1st St, Suite 300, Lufkin, TX 75901.