Investors are waking up to cheaper Bitcoin (BTC 0.08%) on Tuesday. The bellwether cryptocurrency briefly buckled below $60,000 early in the morning, the first time that it has dipped below that mark in more than two weeks.
Bitcoin is now 12% below the high it scored last week, and the pullback is testing the mettle of newer cryptocurrency investors. It's likely not a concern for those who have been in the game longer, as volatility is part of the art of this particular market.
Could things get worse? Of course. It's Bitcoin. Could things get better? Of course. It's Bitcoin. Let's go over some of the reasons taking advantage of the recent correction could pay off for buyers with long-term outlooks.
1. Time has been kind to Bitcoin
When daily charts look scary, it helps to zoom out. With Bitcoin recovering back above $60,000 at 9 a.m. EST on Tuesday, the math is still problematic. Bitcoin has fallen by nearly 8% over the past 24 hours and 11% over the past week. It's roughly flat over the past month. However, it has still doubled in 2021, more than tripling over the past 365 days.
Every dip isn't automatically a buying opportunity, but time has been on the side of the opportunistic in the past. Despite all of the corrections and outright crashes that Bitcoin has experienced, it still hit an all-time high this month.
2. Taproot does change things
Bitcoin has been limited in its functionality as a store of value, but this past weekend's Taproot upgrade should silence some of the knocks that the cryptocurrency is little more than a store of value. Taproot brings improved privacy features, something that is potentially problematic for regulators but generally great for users worldwide. The upgrade also opens the door for lower transaction fees as well as the ability to finally jump into smart contracts and other blockchain features.
If you find it unusual that Bitcoin would sell off despite completing a bar-raising upgrade over the weekend, welcome to the "buy on the rumor, sell on the news" club that defines a lot of anticipated market events. Taproot will make it a lot more useful, and that's undeniable. The daily gyrations are just noise.
3. This isn't 2017 all over again
Seeing Bitcoin soar in recent weeks has invited comparisons to what happened to it four years ago. The world's most valuable cryptocurrency denomination stunned the market by more than tripling in the fourth quarter of 2017. Awe turned to shock when it would end up shedding more than 70% of its value in 2018.
There are no guarantees that Bitcoin won't plummet in the year ahead, but things are different this time. Cryptocurrency in general and Bitcoin in particular are more mainstream. The leading fintech platforms now support cryptocurrency trading, and that wasn't the case four years ago. Some companies are now holding some of their liquid reserves in Bitcoin. A growing number of retail establishments accept cryptocurrency, and there are even Bitcoin ATMs in the wild -- and Bitcoin ETFs to consider on traditional exchanges, even if they are far from perfect.
Bridging this point with the first reason to consider buying this pullback in Bitcoin, time has been kind even to those who purchased at the 2017 top. Bitcoin's price has tripled since its seemingly frothy peak 49 months ago.
There will be ups and downs when it comes to Bitcoin. This won't be the first pullback, correction, or crash (depending on where we land). It won't be the last recovery when the prices do turn higher.