You’ve no doubt heard of bitcoin now. 2017 was the breakout year, but the cryptocurrency has struggled since January. So, is it actually a good investment option? Paul Cliffe, CEO of Block Venture Project, takes a closer look…..

Ah, 2017. I remember those halcyon days of yore with a certain fondness – the giddy build up of hysteria leading to the greatest bull run in the history of markets. But a lot of people who hold an interest in making money, investors if you will, missed out. This was due to a number of reasons – technological barriers, mistrust of an unregulated market, not knowing where to start. This scenario created our mission statement, when we first considered Block Venture Project, after a few years of cryptocurrency investment, trading and speculation ourselves:

We are here to act as the bridge between traditional investors and crypto-assets, increasing their potential returns frontier without adding undue risk.

We developed our maiden fund, the BVP 5 fund, with this mission statement in mind. But the fact of the matter remains – are cryptocurrencies actually a worthwhile investment?

The market has moved from booming in Q4 2017, to being so depressed it should consider booking a doctor’s appointment (if only it could make it out of bed in the morning).

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A quite frankly depressed Bitcoin, struggling to find any direction…….

Well, as tends to be the case of any market cycle, the massive gains tend to give way to big falls and perceived underperformance. That’s how markets work. I’m sure we’re all familiar with the below diagram, the Wall St cheat sheet:

Furthermore, if you chose to read this article, you’re no doubt familiar with the performance of Bitcoin over the last 12 months:

Now, if we match them together, I’m sure we can see the similarities:

Although not an exact match, bitcoin has hit the same peaks and troughs that all markets go through. In fact, if we take the other coins out of the top 5 by market capitalisation, they all show a similar pattern:

So, it’s safe to say that Bitcoin, and the crypto-market as a whole, follows the same pattern as every market does.

But where are we at the moment? Well, in my opinion, I think we are just leaving depression (good news for bitcoin – he can finally make his bed) but we’re about to enter the ‘disbelief’ stage.

I know, right? I should have timed this article better. The CEO of a crypto-fund management firm telling you that the market still has some pain left seems like an odd move doesn’t it? Well, yes and no.

In a stock market, at this point, we’d be looking at anything from 6 months to 3 years to reach a point where the market had shuck out all the weak hands, the stars had aligned, interest rates had fallen, lending was cheap and easy to find, spending was starting to pick up and jobs were being created. But the crypto-market is different. It’s like the stock market on amphetamines (probably a factor in why the depression seems deeper) and doesn’t need the economic cycle to back it up at the moment.

Due to its free market nature, the Crypto-market will probably see this ‘disbelief’ period out in a fortnight to 6 weeks.

So, to the crux of the article – Should you invest in bitcoin now?

Now isn’t perfect, when is?, but it’s still a good time to get in before the next bull run. And who knows how high bitcoin and co will go this time around?

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