Bitcoin Price And Risk Assets Jump In Correlated Move

It seems that no matter where you look today, it is all “go-go-go”! The coronavirus pandemic might be devastating to the world economy but it sure has been beneficial to Bitcoin and cryptocurrencies in general.

Bitcoin Surges

The famous cryptocurrency’s price has surged exponentially since late March, and is now hovering around the $10,000 mark; this is huge a jump since its low of $3,800 seen back in mid March. Bitcoin’s impressive move up can be partially attributed to its increasing institutional acceptance – big companies like Fidelity and Square have been driving adoption.

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Risk Assets Joining The Rally

The good news is that Bitcoin’s surge is not an isolated movement; in fact, it seems to be correlated with the price movements of risk assets. The Dow Jones, Nasdaq and S&P 500 indexes have all seen substantial gains over the past few months, despite the pandemic – only yesterday, the Dow Jones hit a two-month high.

Last Laughs Go To Investors And Day Traders

All the investors, day traders and speculators who kept their faith in risky assets while so many people were panic-selling at the start of the pandemic are finally getting their last laughs. The risk-on attitude of the market – usually left for tech stocks – is spilling over into the crypto space.

It’s Not All Smooth Sailing From Here

Investors should not get complacent yet; with the lucrative opportunities come higher levels of risk. Some market analysts believe that the high volatility of cryptocurrencies make them a great investment for a quick return, sure, but also a huge risk for those without the stomach for it.

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The market is always volatile no matter what asset you’re investing in; before putting your money into crypto, make sure you:

  • Do your own research: Don’t be relying on advice from outside sources and make sure you have a sound understanding of the technology, economics and use cases of cryptocurrencies.
  • Set a trading plan: Before you start trading, set parameters and stick to them. Decide your entry and exit points and don’t forget to use stop-loss points.
  • Manage your margin: Don’t put all your eggs in one basket; diversification is key to success. Make sure you don’t overexpose yourself to one asset, even if its performing well.
    • It’s going to be an interesting few months for Bitcoin and risk assets alike. With the pandemic continuing to rage, who knows what might happen. All we can do is take risks, diversify and keep our fingers crossed… may the odds ever be in your favor!

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