Is bitcoin a buy? – Moneyweb

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That 40% drawdown is about half the size of previous bear-market declines, leading some to believe we have not yet seen the bottom in this cycle. Some see parallels with the early days of stocks like Apple or Tesla, when extreme volatility eventually gave way to more predictable – and bullish – trading patterns.

In this Moneyweb Crypto Podcast, Sound Money Capital CEO Rob Price explains where we are in the current cycle.

“I think we’re in a bottoming process,” Price says.

“There was a sharp drop from October, November last year to February this year, where we saw significant liquidations, capitulation, losses, and then limited response to negative news in the weeks thereafter. That suggested for us that we were in a bottoming process.”

Read:

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“Does it mean that price can go lower? Of course, prices can go lower, but bottoming is a process and also reallocation is a process.

“Trying to predict the bottom is foolhardy. I think it’s more important to understand kind of what season you’re in and how you want to act during that season.”

Just as Tesla and Apple – like many other tech giants – endured extreme volatility in their early years, bitcoin appears to be going through a similar phase.

Extreme volatility remains a barrier to broader Bitcoin adoption, so a reduction in volatility could help expand the pool of potential investors in the years ahead.

Billionaire investor Ray Dalio says he prefers gold over bitcoin and argues that central banks are unlikely ever to accumulate bitcoin as a reserve asset in the same way they do gold or USD. He’s right in some respects, says Price.

Central banks are not loading up on bitcoin in the same way they are buying gold – at least not yet.

They are conservative by nature and may wait to take direction from leaders such as the US.

Listen/read:

Is Ray Dalio’s bitcoin negativity justified?
The crypto meltdown – an opportunity or a trap?

“If you pull back the lens, bitcoin still has a lot of superior qualities relative to gold. Gold is a great asset, I like it, but it’s not particularly portable. [If] you want to send large amounts across the globe, that is a challenge. Storing it is expensive. Moving it is expensive.

“Bitcoin – you can send billions of dollars worth across the world at pretty low cost. Storing it is pretty easy, both for large institutions and for smaller institutions. It’s a much more tech advanced asset. It’s definitely not black or white.

“Bitcoin faces some challenges relative to gold, but long term I’m still very excited about the prospects for Bitcoin relative to gold.”

Read:

Has Bitcoin become a one-buyer market?
Strategy’s Saylor signals potential shift to bitcoin sales

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