Bitcoin took a nosedive on Wednesday, dropping as much as 24% in hours. The world’s most valuable cryptocurrency has now yielded a staggering $ 500 billion in added market value.
The negative movement of the market can have a strong influence on the decisions of investors in the future, especially those who still own the cryptocurrency. It could also have an impact on digital asset exchange-traded funds (ETFs) and Bitcoin mining stocks.
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However, a financial expert believes that the current situation can probably set off a roller coaster for cryptocurrency.
The founder and CEO of New Street Advisors Group, Delano Saporu, during an interview with CNBC, noted that the period in the cryptocurrency industry will work well for investors looking long-term.
He stated that it is a good time to buy at prices that could generate massive profits in the future.
To bolster his point, he cited the last major correction for Bitcoin and crypto in 2017. While the decline continued until 2019, the cryptocurrency then took off, breaking all records it had previously set.
Cryptocurrency Swing Triggered Other Speculative Assets
CNBC’s Jin Cramer noted that the entire market may be affected due to the speculative collapse, but it will be a temporary shock as there could be a “win for the Dow and definitely the S&P,” he added.
Bitcoin fell to three-month lows early last week, before rising from nearly $ 30,000 to trade at $ 39,000 on Wednesday night.
As the cryptocurrency was losing its value, the major averages for stocks also fell over the period, but they still ended the day trading well above their averages.
Cramer noted that the cryptocurrency swing triggered negative trades in other speculative assets, such as SAPC stocks and commonly referred to as “WoodStocks.”
Cryptocurrency crash could be a silver lining
Cramer said there could be a “ray of light” for shareholders even as the crypto industry is experiencing a recession.
He also noted that the drop in cryptocurrency prices in the last week has affected sentiments within the stock market and is creating buying opportunities for investors. He said,
We have to accept the beating of speculative assets for the good of the entire stock market.