Bitcoin: Is It Still a Good Investment?

Bitcoin shocked investors around the globe when it broke records reaching higher than $68,000 on November 10, 2021. Since then, the leading cryptocurrency has seen a lot of ups and downs, including a drop of more than 8% on January 6, 2022.

That’s right, less than two months after reaching record-breaking highs, Bitcoin was trading at $43,225.10, which represented a drop of 8.2% in less than 24 hours. While this type of drop certainly had investors sitting on the edge of their chairs, it was likely spurred by the latest news from the Federal Reserve that an increase in interest rates may come sooner rather than later.

It’s not uncommon for news like this coming from the Federal Reserve to negatively impact the trading of high-risk assets, like cryptocurrency. In fact, Bitcoin wasn’t the only crypto affected. Solana also saw a drop of 3% in trading and Ethereum experienced a 5% decrease. Even cryptos in the Asian and European markets saw a considerable drop in response to the drop in Bitcoin.

Fortunately, after falling to $41,008 the next day, January 7, Bitcoin rates started to bounce back and reached as high as $44,229 on January 13.

While there’s always an element of uncertainty in the market, Bitcoin, and cryptocurrencies like it, come with an extra level of risk. These types of ups and downs are to be expected and are not likely to stop any time soon.

The reality is that investing in Bitcoin isn’t for everyone. Those looking for more stable investments with lower risk factors may want to wait and see how the news from the Federal Reserve settles or even to see what type of jump in interest rates the Feds are considering.

Those willing to take the risk, however, can experience incredible profits, or equally incredible losses. Those ready to take the plunge right now can take advantage of lower Bitcoin rates to either start investing in cryptocurrency or to strengthen their current portfolio. These investors should keep in mind that keeping a close eye on the market is key when investing in assets with fluctuating rates, like Bitcoin.