Bitcoin as a potential investment opportunity?
Answer our short quiz to understand if you're ready to trade!
Baron Rothschild was a nobleman in
the 18th century. He reputedly made the majority of his fortune
following the Battle of Waterloo between England and Napoleon's France. He is
credited as saying "The time to buy is when there's blood in the streets". This
principle is called contrarian investing.
Mega investor Warren Buffet, who follows this theory with his particular investing style, also upholds it. He encapsulated the idea by saying, "Be fearful when others are greedy, and greedy when others are fearful".
Panic causes panic
When the world is thrown into chaos, with events like wars, virus pandemics and other geopolitical drivers like oil supply fluctuations, this can have an impact on the financial markets.
No matter where these events happen, because of the way the global market is intrinsically and delicately interlinked it can impact the entire system. That is what we have seen with the latest Covid-19 virus.
The global economy has crashed and we have seen the worst week in stock market history. The UK saw billions of GBP wiped off the value of its shares, other countries including the US, European and Asian markets have all had billions of dollars wiped off too.
This hasn't happened from the fear of the virus itself though, it comes in reaction to the panic surrounding Covid-19. It's a kind of self-fulfilling prophecy where fear causes panic and this panic is self-reinforcing.
Negative interest on savings
The Federal Reserve and many Central Banks have slashed interest rates, which means that investors will no longer get interest on their savings. Put this alongside inflation and they will see chunks of money being bitten off their savings.
It means that investing in the right things is more important than ever, in order to weather this storm.
Safe haven assets come in to play
This is where safe haven assets come in. People are running to the safety of gold and precious metals, as well as to the major cryptocurrencies like Bitcoin and brick and mortar investments like property.
Bitcoin tends to be negatively correlated to the USD, so when the value of the USD plummets than this can push up the value of Bitcoin. It's a good time to buy Bitcoin when the USD is in panic mode.
When markets are oversold like the stock markets are now, with everyone dumping shares in the uproar, that is when it is time to buy these shares and that is the true meaning of contrarian investing.
This is when the brave people can potentially make their fortunes. This can be risky, but it can also pay off big time. It's when millionaires are made.
Learn how to take advantage of markets in times of fear
If you would like to learn more about contrarian investing and learn about how to invest in Bitcoin and other safe haven assets then leave your details below.
We have partnered up with a trustworthy broker that can help you get started, no matter how much or little you know about the markets.
They will support and guide you, provide you with FREE tools and technology, as well as education and a practice account. Leave your details below and have a chat first.
Our certified online trading platform is looking for people interested in trading, and offers the following benefits:
- Free registration to the platform
- Updated trading charts in real time
- Partnership with available expert tutors
- 12-hour support and assistance
- Simple and useful tools to learn all the tricks of trading
- Getting started doesn't require a large down payment. All you need is a small deposit (minimum $250).
Answer our short quiz to understand if you're ready to trade!
This article was submitted by RefinedForex.
