Good news, we might have just made it through the first rather big correction. With BTC dropping to $290 on MtGox not even two days ago, we are already back up at $360. That’s a price drop of about 25%, so whoever was quick enough to buy low could already be sitting on some nice profit.
Today I also came across a very interesting document, which provides some basic ideas on how and why Bitcoin should be really valuable.
Now who would’ve thought that. Today we reached a whopping $395/BTC on the MtGox Bitcoin Exchange. Breaking records.
I’m still not satisfied though, to be perfectly honest I think Bitcoin will be worth way more than just $400 in the long run. Still, it’s going in the right direction for now, which is good. Creates some buzz.
Should you still get in now? Well, after those last few days saw a massive increase in Bitcoin price, I’d recommend waiting for a small bubble to pop before investing. Bitcoin should grow, but not at that rate, it’s rising way to quick and that’s just crazy. Which means I predict a small correction within the next week. Don’t get burned, wait it out and invest when the time is right.
If you can’t wait to get in on the crypto-currency market, I still recommend buying Litecoin. Bitcoins little brother is not getting enough media attention, that’s the only reason the price is that low. I mean it’s basically the same thing: if you know how to deal with Bitcoins, you also know Litecoins. If you are able to accept Bitcoins as a merchant, it’s really easy to also accept Litecoin. There is gold, then there is silver, and they exist side by side just like that.
So how come LTC is only worth 1/100 of a Bitcoin? Looks to me like it’s just waiting to double or even quadruple within a year. Long-term investment, check.
If you don’t plan on holding bitcoin for the long run, be aware of possible panic dumps.
Speculation is running rampant, the market is volatile and will probably stay that way until Bitcoin gets widely accepted as a currency.
Especially due to the volatile nature of Bitcoin, short-term trading is becoming more and more popular, which will lead to even more instability. I DO NOT recommend getting into this without profound knowledge in economics and market development.
Don’t let that discourage you though.
If you believe in Bitcoin as a currency, the safe bet would be to get your fair share of BTC and sit on them for a while. Capped at 21 Million, Bitcoin has limited availability built-in. This means rising interest in the currency will always fuel it’s price. Until everyone who wants in on Bitcoin is satisfied, no matter how many bubbles pop, it will gain value in the long run.
The beauty of economics.
Be careful, it’s your very own money after all, and don’t sell without reason.