Crypto Hedge Fund Founder Says “It’s a good time to buy”
Like any market you might want to invest your money in, the prime time to purchase any asset or exchange fiat into cryptocurrency is when the prices are low. Since the boom at the end of 2017, bitcoin, in particular, went from nearly $20,000/BTC to struggling to stay above $7,500/BTC, much to the chagrin of investors who bought in when the price was still inflated.
According to Dan Morehead, the founder of Pantera Capital Management said in an interview with CNBC that now is a good time to buy bitcoin. He went on to explain the reasoning behind buying in now when the markets are low so as to secure an early position. Also mentioning the fact that as more regulations come out to support the cryptocurrency industry, more institutional money will flow into the market. Pumping the prices up, not with speculation, but with quality investors’ more secure infusions of capital into the market.
“Many institutions are essentially buying the rumor of potential SEC regulations and selling the fact. Getting invested now so that in three, four, five months when the institutional, quality-regulated custodians that we’re hearing about come online, they’ll already have their positions.”
This method of buying low, holding for a majority of the year as the price gains momentum and then sell once it has spiked well beyond the price point you bought the coin at. We have seen this behavior in the market every year, with the first two quarters seeming sluggish to start, only to then explode later in the year. The people who invested during the bear run will be in the ideal position for when the price increases. Morehead suggests that investors: Buy a currency once it breaks its 230-day moving average, wait a year and sell.
A sound tactic for anyone new to the cryptocurrency market and who prefers investing and HODLing over the tedious day trading grind which, if you are not experienced, can cause significant losses given the volatility in the market. But Morehead and others are confident that with the inclusion of more institutional money riding the tails of regulation into the market, there will be a greater level of stability and we will see a more consistent appreciation of bitcoin and others as adoption starts to increase once again.