Guatemalan Experts weigh in on falling Bitcoin Price
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- 23 Aug 2024
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The value of cryptocurrencies, particularly Bitcoin, has experienced a significant downturn in recent days, raising concerns among investors in Guatemala. Since last Monday, Bitcoin has lost more than 10% of its value on the New York Stock Exchange, prompting debates about the viability of investing in digital currencies amid global economic uncertainties.
Despite a growing yet still nascent interest in cryptocurrency investments within Guatemala, the recent market fluctuations have led to uncertainty among potential and current investors. The global economy has suffered notable setbacks, with major indices such as the Nasdaq and Dow Jones closing in the red on August 5. This marks the first major economic crisis involving cryptocurrencies since the 2008 financial downturn, the most severe since the Great Depression of 1929.
In light of these developments, Soy502 consulted with two local experts to gather insights on how Guatemalan investors might navigate the current cryptocurrency landscape. Both experts emphasized that their perspectives should not be considered direct financial advice but rather informed opinions on the situation.
Gustavo Mendoza's Perspective
Gustavo Mendoza, an economist and Bitcoin specialist, suggests exercising patience and caution before making any significant investment moves. He recommends that interested investors monitor the economic indicators closely to determine whether a full-scale economic recession is imminent, which could influence the optimal entry point for purchasing Bitcoin.
"Ideally, this process should involve buying with capital that one is willing to lose because it is a volatile asset," Mendoza explains. "Ultimately, no one can predict the future of financial markets, so it's important to stay informed and seek professional advice."
Mendoza proposes a strategic approach known as dollar-cost averaging, where investors allocate a fixed amount of money to purchase Bitcoin regularly, regardless of its current price. This method can help mitigate the impact of volatility by averaging out the purchase price over time.
Carlos Roberto Oliva's Insight
Echoing a cautious stance, economist and Bitcoin investor Carlos Roberto Oliva suggests that while current low prices might present a buying opportunity, investments should be modest due to prevailing uncertainties.
"At this moment, I would buy a certain amount, but not too much," Oliva advises. "If there is a recession, it will test whether cryptocurrencies are a good substitute as a store of value asset, similar to gold and silver, whose prices typically hold during times of crisis."
Oliva underscores the inherent risk involved and emphasizes the importance of observing international market trends before making substantial investment decisions.
"It's a risk I could take, but I wouldn't invest much because it's uncertain," he states. "The ideal scenario is to sell when the price of Bitcoin is high. When the price is low, you can buy, but you have to have faith that the price will go up."
Moving Forward
Both experts agree that the current climate calls for measured and informed investment strategies. The volatile nature of cryptocurrencies like Bitcoin necessitates a thorough understanding of market dynamics and personal risk tolerance. Investors are encouraged to stay updated on global economic trends and consult with financial professionals to make decisions that align with their financial goals and capacities.
As the global economy continues to navigate through these turbulent times, the performance of cryptocurrencies will be closely watched as indicators of resilience and potential alternative investment avenues. Guatemalan investors, like their global counterparts, will need to balance optimism with caution as they consider their positions in the evolving digital currency market.
