After a solid year of bitcoin making low after low, you might think that it will continue to make new lows. You might even be so confident as to sell bitcoin short - that is, to borrow bitcoins in order to sell them, and profit when it goes lower. Would that be a smart move in market like this?
Or would the opposite action be correct - has crypto been going down for so long that it's "due" for a turn around? Should you invest in cryptocurrency now, in February 2019?
The other day I spoke with long-term Bitcoin enthusiast and software developer Chris Guida to get his take. Scroll down to watch and listen to this episode.
Should I invest in bitcoin?
Chris notes how the market is down more than 80% from its peak, with many altcoins losing more than 90% from their all time highs. He says the idea is to start slow, dollar cost averaging, putting in $5 or $10 a week and building up slowly. A small amount of exposure to crypto can make a big difference in the long term.
Should I short bitcoin?
Nobody knows where the crypto market will go, but after one year of going down, it's less certain that it will keep going down. A personal short-selling strategy from Chris is to catch an asset on the day that it first makes a big drop after a huge rally, such as when Monero made a stellar rise after gaining acceptance in dark web markets. Short-selling is risky, and so it's prudent to limit shorts to a very small part of your portfolio
You can hear more from Chris on our other podcast, the Crypto Hippie Drum Circle
Disclaimer: As always, this is not intended as financial advice. We don't know your situation, so we can't make recommendations for you. We're merely explaining our own thinking processes when it comes to investing.
The Episode
You can listen to the episode on Anchor and other podcasting services here: Cryptonomics - Should I short bitcoin?. Or watch on YouTube below:
