Bitcoin (BTC +1.13%) looked unstoppable last year, surging to an all-time high of $126,198. Analysts and public figures in the crypto space, including Coinbase CEO Brian Armstrong, were predicting that Bitcoin could reach $1 million per coin by 2030.
There's far less enthusiasm surrounding Bitcoin now that its price has fallen over 40%. And that's why this is a great time to invest.
Image source: Getty Images.
CoinMarketCap's Crypto Fear and Greed Index is firmly in the "fear" section, with a score of 26 (as of March 10). As recently as last week, it was below 20, indicating extreme fear.
This index can be a useful way to gauge whether the crypto market is overvalued or undervalued. It's by no means perfect, but since most stock valuation metrics don't work with cryptocurrencies, investors need to take what they can get.
The current score indicates that investors are highly bearish on Bitcoin and other cryptocurrencies. But the bull case for Bitcoin hasn't changed.
It's the largest digital asset by a wide margin, accounting for $1.4 trillion of the $2.4 trillion crypto market. The creation of the U.S. Strategic Bitcoin Reserve last year and more institutional support through Bitcoin ETFs should raise the cryptocurrency's price floor. The supply limit of 21 million coins makes it somewhat scarce and could make it more valuable, provided demand continues to grow.
CRYPTO: BTC
Key Data Points
To be clear, Bitcoin might not have reached the bottom yet. No one has any way of knowing when or if it will rebound. Still, it has historically recovered from every bear market and crypto winter, going on to set new all-time highs again and again. If you're bullish on cryptocurrency, consider picking up some Bitcoin during this downturn.
