Is It Too Late To Buy Cryptocurrencies, Or Is 2022 The Perfect Year To Invest?

Cryptocurrencies are nearing hyper-adoption, both in terms of the retail and institutional parts of the market. Wells Fargo likens the growth in popularity of digital assets across individuals to the rise of the internet during the 1990s. Morgan Stanley compares the magnitude of digital assets institutionalization to the one of gold 45 years ago. The debate is no longer whether cryptocurrencies are here to stay but whether is it too late to join the niche.

Why Joining Today Might be a Viable Idea?

Long-term investors prefer cryptocurrencies mainly through the so-called HODL strategy (buy-and-hold). Such a strategy is viable considering that cryptocurrencies are here to stay, and most analysts have bullish long-term price forecasts.

Short-term predictions indicate prices up to $500,000 per Bitcoin, and others are even more bullish with price targets beyond the 1 million price level.

The next question that has to be answered is when will that happen. What is known for sure is that different triggers can unleash Bitcoin's journey to the stars.

These can include raising global geopolitical tensions that massively erode the trust in the conventional financial system, mainstream crypto adoption, a continuing trend of growing institutional investments, more exchange-traded products, and so on.

However, an investor determined to go long on Bitcoin won't wait for those triggers but instead, take advantage of the current low prices and consider buying soon.

Many experts predict that the recent price action is a mid-term consolidation before the $100,000 price target is reached by the end of the year, while other investors hold more moderate views.

Rushing to buy Bitcoin today for $41,000 just because it is relatively cheap compared to the all-time high of $69,000 isn't a viable strategy. If digital assets don't align with the long-term financial strategy, it is better to remain on the sidelines,"

Is it Too Late to Invest in Bitcoin?

Many investors are anxious that they didn't join the industry when Bitcoin was worth a few dollars. As a result, they constantly feel the fear of missing out (FOMO) and wonder which is the right moment to invest. Of course, this widely spread notion is valid for digital assets and virtually all investible instruments.

The most famous saying in the investing world is that "The best time to invest was yesterday, while the second-best is today."

For crypto assets, this becomes evident by the day.

The crypto ecosystem is evolving, security is getting better, transparency is increasing, and digital asset trading is getting easier and cheaper. In addition, sophisticated digital asset-based financial products and services are introduced continuously, in line with the demands of institutional and retail investors. In a nutshell, the industry is thriving and becoming more welcoming.

Most investors on the fence about joining the niche realize that. However, what is still sowing grains of doubt is whether they have missed the perfect moment to join the market. Alternatively, if it is worth buying Bitcoin at prices of $40,000 or above when they could have done it at levels of under $1,000 or even $10 a decade back.

What Bitcoin's Price History Tells Us

Since the inception of Bitcoin in 2010, cryptocurrencies have been among the best-performing assets with periods of crushing dominance compared to the stock market. For example, the annual return of Bitcoin since the first transaction was recorded is estimated at 216%. During the same period, the S&P 500 gained 16% per year on average.

While stats like these might further strengthen investors' FOMO, they also help paint the picture of the price trend. And it is very telling. Here are a couple of scenarios of what $100 invested in Bitcoin at different points in time would amount to today:

·    $100 invested on January 1, 2012, would be worth $848,330 today

·    $100 invested on January 1, 2015, would be worth $13,305 today

·    $100 invested on January 1, 2020, would be worth $581 today

As can be seen, the early movers are well-awarded for their opportunistic views. Twelve billionaires with crypto backgrounds are currently featured in the Forbes Billionaires List.

But the more important reflection that can be seen from these trends is that the market has offered plenty of profit opportunities at every single point in time. No matter whether capital was invested in 2012, 2015, or 2020, if held for the long term, it would have grown significantly.

It's Likely That More Investors Will Start Investing In Crypto

Critical for investment decisions in new and revolutionary asset classes is to avoid focusing too much on past performance but instead look at the broader picture. The bird-eye view of the crypto market tells us that investors who still haven't joined hadn't lost much.

The asset class is just 10 years old and started virtually from zero, which explains the huge gains. Furthermore, the majority of the projects are less than 5 years old. This leaves plenty of potential profit opportunities to be exploited going forward.

A little over 3% of the global population invests in crypto currently. As the niche progressively matures, the number of investors is set to increase. And with that, so will the prices. So, in the end, with Bitcoin, opportunities lie ahead, not behind us.