The entire crypto market has reached record 1 year lows recently. Is it now time to start buying Cardano again?
Short answer is “Yes!” but only if you are in the situations I describe below. Before reading further, please understand that this is not financial advise. Each person should do their own research and apply what is appropriate for their own financial situations. With that disclaimer please read on to find out in which situation it will be good to buy Cardano today:
You have enough spare cash
This may sound obvious as how would you buy ADA if you don’t have money. But what I mean is you already have your emergency funds already set aside and you have sufficient money for a Cardano investment.
You are diversified in non-crypto investments
As discussed in my previous article where I described asset allocations, you should invest only a maximum of 10% in crypto. The rest should be invested in other less risky asset classes like real estate, bonds, unit trusts and even stocks.
You are diversified in crypto investments
Even within crypto, you should not put all your money into one coin. This will save you from losing all of your investments if one coin collapses due to bugs, hacking, or other causes. A good mix would be to go into the topmost coins by market capitalisation (e.g. Bitcoin and Ethereum), and mix that with smaller coins that have potential.
You believe in Cardano’s goals
If you are just in it for the money, you may easily make irrational decisions like panic selling when there is a sudden price dip. Believing in Cardano’s goals of providing financial access to the unbanked can help you weather the inevitable price swings in crypto.
You are prepared to play the long game
Cardano is slowly completing its development roadmap and as of this writing, more than 900 projects are under development. Nevertheless, it will still take years before we can see life changing price movement. If you are just out to make a quick buck, then Cardano is not for you.
You have time to keep track of it’s development
Aside from the applications being developed on Cardano, Cardano itself is still under development. It is now in the 4th phase in a 5 phase development roadmap. As with all investments, price movement happens when project milestones are completed. Cardano is no different so you should allocate time to monitor its development.
Cryptocurrencies and Cardano in particular is not for every investor. Cardano is not as volatile as other cryptocurrencies like Bitcoin so it is not very effective for short term traders. However, for long term traders who are willing to wait until Cardano is fully developed and the ecosystem is fully functional, the possibilities are endless. Aside from annual interest rates of about 4%, the price increase of ADA in a few years is expected to be phenomenal. Therefore, if you fit all of the situations I described above, then it may be a good idea to proceed with investing in Cardano especially now that it’s price is at a huge discount from it’s all time high.
If you do decide to start investing, I suggest not to put in all your planned purchase at once but instead make regular smaller investments. This is because the entire market is being influenced this year by US rate adjustments and the war in Ukraine. Both of these have a bearish effect on the market throughout the year. Therefore, the low prices that we see today may become even lower in the months to come. To protect ourselves and still not lose out on this buying opportunity, buying small amounts throughout the year will help you overcome any negative price movements in the future.
WISH Pool is the creator of Cardano SPOT Check, an online resource for Cardano Stake Pool Operators for maintaining their nodes. We are actively helping several Cardano communities and were a recipient of the IOG delegation in 2021 and the Cardano Foundation delegation in 2022. If you like this article, we greatly appreciate if you will delegate your ADA to WISH Pool. You will be earning interest rewards while indirectly helping the lives of disadvantaged children. This is because WISH Pool pledges to give at least 10% of its own profit to educational charities so that successful students can help get their families out of poverty. Let’s help grow the community together!