Recent Bitcoin (BTC) price correction has created one of the best buying opportunities for new investors this year because the most valuable currency’s price is likely to end 2021 significantly higher.
The latest selloff, which erased almost $12,000 in just a few days, came after the largest digital currency hit an all-time high of $58,000 last week. Institutional investors and other big players are also capitalizing on the BTC price dip.
Bitcoin looks more attractive around $45,000
Making short bets after the cryptocurrency erased more than $12,000 in just four days doesn’t appear like a wise strategy. This is because Bitcoin’s fundamentals look strong, and the latest selloff is mainly blamed on retail investors profit taking strategy.
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Moreover, a strong adoption rate limits Bitcoin price downside ahead. Tesla (NASDAQ: TSLA) has announced to accept Bitcoin as a valid form of payment, while the Bank of New York Mellon (NYSE: BK) recently presented plans to launch a digital asset division later this year. Indeed, strong critics like JPMorgan Chase (NYSE: JPM) now suggest investors add cryptocurrency into a portfolio.
“In a multi-asset portfolio, investors can likely add up to 1% of their allocation to cryptocurrencies in order to achieve any efficiency gain in the overall risk-adjusted returns of the portfolio,” the investment firm said in a note Wednesday.
Recent events added to fundamentals
For instance, MicroStrategy (NASDAQ: MSTR) CEO Michael Saylor, who recently suggested corporate executives add some Bitcoin to their balance sheet, invested another $1.02 billion in cryptocurrency at an average price of around $52,665 per coin.
The payment giant Square (NYSE: SQ) had also purchased $170 million of Bitcoins when the digital coin was around $51,236 level.
“The investment is part of Square’s ongoing commitment to Bitcoin, and the company plans to assess its aggregate investment in Bitcoin relative to its other investments on an ongoing basis,” the company said in an earnings call.
What’s more, the San Francisco-based cryptocurrency exchange Coinbase saw a big purchase of 13,000 coins in Thursday trading, which is the bullish signal if you plan to go long on the digital currency.
