Like virtually every other asset in the market, Bitcoin has taken a knock as a result of the coronavirus pandemic. With prices tumbling by a dramatic 50% in the first week of March, recovery has still not been forthcoming. Although the scale of the drop is significant, a prolonged bear market is likely to be the inevitable result of the economic turbulence which COVID-19 is creating. Although Bitcoin’s digital nature means it’s not directly vulnerable to the problems the virus is creating, it’s inevitable its position will remain volatile whilst so many national economies are being put in sudden and substantial decline.
Historically, there is cause for optimism
As governments across the globe implement increasing restrictions on movement and trade, it could well be the case that Bitcoin continues to see prices which are lower than in the recent past for some time to come. However, longer-term analysis of Bitcoin prices shows that the cryptocurrency tends to go through cyclical bull and bear periods, coming out of each, only to move to the next over time. For investors, this could indicate that hanging on to stock at this point is a good move, as recovery will be on the way in the next few months. It’s also a good time to buy, although the purchase would be a longer-term investment in order to stand the best chance of optimising a profit.
What do the experts say?
Opinion on the immediate future of Bitcoin is varied! Whilst some commentators (including Gov.capital, Longforecast and Digtialcoinprice) are predicting modest price rises in the next month (although far below late February prices), Cryptorating and Cryptoground have less optimistic forecasts. With so many uncertainties regarding the progress of COVID-19 in the next few months, the watchwords have to be caution and conservative trading.