As of January 24, 2022, bitcoin (BTC) is oscillating around $35,000, which is only nearly half of the almost $70,000 it was worth in November 2021. Recently, however, tech stocks have also suffered heavy price losses. The current macro environment is blowing massive winds against cryptocurrencies and growth stocks. Above all, the feared end of the phase of cheap money scares investors. Interest rates are to be raised to combat post-pandemic inflation. Expensive money is apparently also an enemy of Bitcoin & Co. Investors should actually invest in BTC because of inflation fears. But they don’t!
As Ciaran Ryan on Moneyweb points out, BTC is still up 18% over the last 12 months. That’s only slightly worse than the 24% gain in Apple’s stock price and on a par with the 18% gain in the S&P 500 index. If you bought and held BTC on any day since its inception and held it for five years, the worst annual return you would have would be 27%.
During the recent bull market, BTC experienced over six pullbacks of greater than 20%, and every time it has proceeded to rally more than it pulled back. The recent bitcoin pullback has been textbook in nature. The Fear & Greed Index currently shows “extreme fear.” This, however, may be considered a “buy” recommendation.