Today’s price action in the wide world of cryptocurrencies has been broadly negative. Indeed, when the three largest tokens by market capitalization — Bitcoin ( BTC -5.67% ), Ethereum ( ETH -7.73% ) and Binance Coin ( BNB -5.90% ) [As of 14th December 2021]
The overall crypto market was down 3.6% over the past day, driven largely by these moves. The other leading cryptocurrencies are also struggling to recapture the momentum they saw last month, which took them to new all-time highs. Despite the stagnation, several leading analysts are confident of a resurgence before the end of the year, with some even predicting a record-breaking end to 2021.
Today it was reported that Binance has removed its application for a Singapore exchange. Additionally, Binance announced plans to completely remove its trading platform from Singapore by Feb. 13 and focus on other markets. This has proven to be a big blow for Binance and overall sentiment in the crypto space, as various global blockchain hubs continue to crack down on crypto in recent months. It should be noted that this news follows high-profile regulatory crackdowns in China and India for Bitcoin mining and crypto, in general. Investors appear to remain on edge with respect to the increasingly hawkish global regulatory environment surrounding the crypto sector.
Furthermore, last week’s Congressional grilling of crypto executives provided the latest regulatory concern, given that the U.S. has been viewed as a relatively safe haven for these digital currencies. SEC Chairman Gary Gensler further emphasized the need for more crypto regulation by publicly requesting crypto exchanges to “come in, work with the SEC.” Visa is launching crypto consulting services to support more mainstream adoption of Bitcoin and other digital currencies among financial institutions and retailers.
As there are more than 12,000 cryptocurrencies out there right now, each with its own catalysts and headwinds. It is obvious that the headwinds being felt by these three top cryptocurrencies appear to be bleeding into most cryptocurrencies today, with a sea of red forming this morning.
The U.S. needs more crypto regulation, Gensler said once again in an interview with the Wall Street Journal that published Sunday. Cryptocurrency fits into the “broad remit” of the SEC, Gensler said in the interview. “I’ve said publicly, ‘Come in, work with the SEC, get registered.’ It’s really important to get that investor protection.” The comments echo remarks Gensler made to the SEC’s Investor Advisory Committee earlier this month.
Bitcoin fell below $47,000 and Ethereum fell below $3,800 Monday, extending a slide that started late Sunday. Bitcoin and Ethereum have seen big ups and downs in the weeks since they each set new all-time highs last month. The volatility follows new economic uncertainty brought on by the Omicron COVID variant, ongoing comments by U.S. officials and lawmakers on crypto regulation, and the $1.2 trillion infrastructure bill signed by President Biden last month that includes crypto tax provisions.
2 important points I would like to highlight today :
1) Never Catch The Falling Knife (Buy Low, Sell High)
2) When The Big Dogs Lead The Way, The Others Will Follow
If you’re trying to build a position because you think they’ll be higher in a few years, then you have plenty of time to accumulate the top 3 coins. For example, if you want to risk $1,000, you don’t need to buy the whole thing in one shot, you can buy in increments. $250 at $50, another $250 at $45, etc. Or you can buy $500 today another $500 two weeks from now. However, remember to always have an exit plan, especially if you’re just looking for a quick bounce. If you get lucky and catch the bottom, make sure you don’t turn a trade into an investment.
Buy low sell high sounds great, but usually knife catchers buy low and sell lower.
If you’re going to play this game, make sure you do it responsibly.
Cryptocurrency is still very new, and everything from innovation to regulation can have outsize impact for investors. Here’s how you can invest smartly, regardless of what’s making news or Bitcoin’s price swings.
Personally I feel that the most important thing all crypto investors should know, that whether they are investing in Bitcoin or other altcoins, is not just to have a plan in place, but to also have a plan they can stick with. While buying the dip might be attractive, especially with an project that you really like, it might not always be the best idea at the moment.