Bitcoin took a massive nosedive on Wednesday, dropping as much as 24% within hours. The world’s most valuable cryptocurrency has now shed an astonishing $500 billion in aggregate market value.
The negative market movement can have a strong influence on investors’ decisions moving forward, especially those who still hold the cryptocurrency. It could also have an impact on digital asset exchange-traded funds (ETFs) and Bitcoin mining stocks.
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However, one financial expert believes that the current situation may likely trigger a roller coaster ride for the cryptocurrency.
Founder and Chief Executive Officer of New Street Advisors Group, Delano Saporu, during an interview with CNBC, noted that the period in the cryptocurrency industry will play out well for investors looking at the long term.
He stated that it’s a great time to buy at prices that could churn out massive gains in the future.
To buttress his point, he cited the last major Bitcoin and crypto correction in 2017. While the dip continued until 2019, the cryptocurrency later took off, smashing every record it has set previously.
Crypto swing triggered other speculative assets
CNBC’s Jin Cramer noted that the entire market can be affected due to the speculative meltdown, but it will be a temporary impact, as there could be a “win for the Dow and definitely the S&P,” he added.
Bitcoin fell to three-month-lows earlier last week, before climbing from almost $30,000 to trade at $39,000 on Wednesday evening.
As the cryptocurrency was shedding its value, the major stock averages also fell during the period, but still ended the day trading well above their averages.
Cramer noted that the cryptocurrency swing triggered negative trading in other speculative assets such as SAPC stocks and the commonly-named “WoodStocks.”
Crypto meltdown could be a silver lining
Cramer said that there could be a “silver lining” for shareholders even as the crypto industry is experiencing a downturn.
He also pointed out that the fall in crypto prices in the last week has affected sentiments within the stock market, and it’s creating buying opportunities for investors. He said,
We need to accept the beatdown in speculative assets for the greater good of the entire stock market.