Today we saw Ethereum and other cryptocurrencies like Bitcoin and Litecoin recover some of the losses from earlier in the week. While the correction may not be over, Ethereum's gains in the last 24 hours should be no surprise. People see an opportunity. Buy low, sell high. If only we could look into the crystal ball and see what will happen next.
While Ethereum may never go back down to pre-2021 levels, it is possible. Are you on the sidelines waiting to see whether cryptocurrency will creep back to levels before the 2021 buying frenzy? I wouldn't count on it, but here is why it is possible:
I am not psychic or prophet. However, a quick history lesson may provide some future perspective. In late 2017, Bitcoin and Ethereum had major runs. Some people doubled, tripled, or quadrupled their positions within just a few weeks or months. Once they hit a peak in January of 2018, people wanted to reap their reward. A major sell-off sent these two crypto pioneers into a downward spiral throughout 2018. Then, 2019 was a very stable year without too much drama. And we all know how exciting 2020 was for cryptocurrency enthusiasts. Now here we are again.
Should we expect a similar pattern? Will the rest of 2021 be relatively uneventful, other than a continued correction? I do not think so. First of all, we do not know if we have hit this run's peak. Furthermore, there are so many more players (think Paypal and crypto-gaming) involved as well as high profile investors. There are many more ways that cryptocurrency can be used in the marketplace than there were in 2018. Even if a crypto bear marches forward, many successful investors are looking long term. This isn't a Gamestop run. This isn't a trend. Cryptocurrency is part of our future in my opinion.
That is why I do not expect the levels to go back to Fall 2020 levels. Therefore, I will not wait before I buy. I could be wrong. I am planning for the long haul. I will buy now and wait and see what happens. If I am wrong, I will buy more later on and enjoy the ride.
