After rallying back to $45,000, Bitcoin suddenly fell in the last few days. Pundits attribute Bitcoin’s price now depends on the stock market indices, namely S&P 500 and Nasdaq. Threats of war between Russia and Ukraine continue to add to volatility.
Bitcoin reacted to growing European tensions by falling 5% recently. The choppiness will continue this year. The Federal Reserve’s tapering, or the withdrawal of easy money in debt and the stock market, is the main headwind for BTC-USD. Investors who bought BTC years ago may ignore the noise. Speculators who are entering the cryptocurrency market will need to exercise caution.
Bitcoin is a worthwhile trade. Define buy and sell zones for the currency. When it falls or rises to those zones, buy and sell, respectively. Should volatility ease this year, trading crypto is less profitable. Investors may consider creating an account on a crypto platform. In holding for the long term, be sure to compare the commission rates.
Some platforms offer interest on holdings and are paid with cryptocurrency. The generous return may offset the volatility, which has an impact on the crypto portfolio value. Still, regulators are starting to crack down on platforms that provide such offerings.
Investors who prefer to trade stocks may avoid Bitcoin. Instead, Coinbase (COIN) and Voyager Digital (VYGVF) are stocks that trade on Nasdaq and Over-the-counter exchange.
