Lately, after trading range-bound for months, Bitcoin has been showing signs of gaining momentum again.
This past weekend, Bitcoin, along with Ethereum and many other coins, saw a bit of a rally. The coins actually gained a significant amount, but for the sector, it doesn’t necessarily mean much yet. It’s this little bit of momentum, though, that can start to create a massive snowball effect.
The key with Bitcoin is approaching it long term. I say this all the time, but it’s the only way to approach the high-potential industry due to its volatility.
And just because a coin or even a stock, for that matter, is volatile doesn’t necessarily mean that the larger majority of investors are buying and selling that often.
If only a small percentage of the total Bitcoin outstanding is traded, for example, it can create significant volatility in the asset.
So, you can’t take much from the short-term price movements as a long-term investor. If you’re bullish and decide to invest, you need to commit to the investment.
And right now might be one of the best times to make that commitment and buy Bitcoin while it’s still undervalued.
The next major rally There are plenty of catalysts and reasons why Bitcoin could rally again soon. New and innovative technologies in the space could continue to attract new investors, adding to the sector’s popularity.
Furthermore, many investors have looked to alternative assets like Bitcoin to hedge against inflation. So, these days, with inflation continuing to pick up, Bitcoin could see another major rally.
All there needs to be is a little momentum in the sector, and Bitcoin’s rapid growth potential will do the rest.
We saw this after its recovery in 2020. It bottomed around US$4,000, recovered to more than US$7,000 only a few weeks later, and ended up rallying all the way to more than US$60,000 earlier this year.
So, if you’re looking to buy Bitcoin while it still offers great value today, here are your options.
The best way to buy Bitcoin today There are a few ways you can buy Bitcoin that depend on your preferences as an investor.
The easiest way to gain exposure is through a fund that buys and holds the digital coin for you. There are a few of these top investment funds to consider. One of the best with some of the lowest costs in the industry is CI Galaxy Bitcoin ETF.
Another way you can gain exposure to Bitcoin’s impressive growth potential is to buy a cryptocurrency miner like Bitfarms (TSXV:BITF). However, crypto miners like Bitfarms are a lot riskier and more volatile than investing directly in Bitcoin.
While Bitcoin is already extremely volatile, these stocks are leveraged to the price of the digital currency. So, they can rally or fall a lot faster than the high-potential coin.
In addition, you have to watch how the company is performing and continuing to outpace its competitors. Crypto mining is extremely competitive. So, while these stocks certainly offer more potential than investing strictly in Bitcoin, there are significant risks to be cognizant of.
Whatever strategy you prefer to give you exposure to Bitcoin, though, just make sure you’re committed for the long run. It will help you mitigate short-term volatility while ensuring you don’t miss out on any of its insane long-term growth potential.
The post Is Bitcoin About to Rally Again? appeared first on The Motley Fool Canada.
Fool contributor Daniel Da Costa has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
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