Bitcoin, until the recent LUNA-UST crisis was speculated to have been trading within an accumulation zone to strengthen its rally. However, the scenario differed to a large extent when the star crypto faced a massive rejection on its way to $50,000 in the last few days of Q1 2022. Further, the LUNA-UST crisis dragged the BTC price towards a 10-month low level strengthening the bears at the press time.
Partner at crypto fund Pantera Capital, Paul Veradittakit believes now is the right time to invest in long-term, high-liquidity cryptos that are trading at more accessible levels. He thinks prolonged market weakness could eventually crowd out the most successful long-term projects.
In an blog-post surveying the current bear market, Veradittakit mentioned the the reasons why this is the best time to invest in the current bear market which include,
- In the bear market, companies and different platforms are more focused on building and entrepreneurs are jumping for the right reasons
- New talents enter the markets
- Favorable valuations
- Investors find great value in successful long-term businesses in these times
Collectively, Veradittakit says that the best performing companies so far have emerged from the last bear market and hence asks the crypto-verse to be patient, mission-driven and resilient.
What long term “high liquidity” assets can be considered?
Assets with high liquidity and long duration are essentially those that can withstand a massive liquidation. No doubt he can have a negative impact but manages to keep the situation trembling quickly.
Bitcoin (BTC)
Bitcoin is the best asset that fits this case. The recent Terra-UST crash was the best example of when BTC’s price stabilised notably overcoming the liquidation of 80,000 assets. No doubt the price quickly fell down to a 10-month low, yet managed to recover to some extent.
Ethereum (ETH)
On the other hand, the second largest crypto Ethereum shows more stability than Bitcoin. Recently, Ethereum co-founder Vitalik’s rounds liquidating 30,000 ETH topped the crypto space. But this had little impact on the price of ETH. On the contrary, platform upgrades do not have a big impact on the price either.
Along with the top 2 cryptos, assets which have sustained a couple of bear markets may be considered for long-term positions. Primitive tokens with strong fundamentals like XRP, ADA, SOL, AVAX, etc and many more can be considered as high-liquidity, long-term assets.
