Crypto Talk: Election year economic policies could propel Bitcoin to new heights, predicts Rajagopal Menon of WazirX

Given the current bullish trend in Bitcoin's price, many investors are wondering if now is a good time to invest. What factors should they consider before making a decision?
Rajagopal Menon: While the current bullish trend may seem enticing, it's crucial to consider Warren Buffett's advice on not trying to time the markets. A smarter approach would be to employ a systematic investment plan (SIP), gradually investing over time. This method averages out the cost and embraces volatility, allowing investors to buy more Bitcoin when the price corrects.

Some analysts argue that Bitcoin's recent surge is speculative and unsustainable. How do you respond to these concerns, and what indicators do you look at to gauge the market's health?
Rajagopal Menon: Critics and naysayers have been predicting Bitcoin's demise for over 15 years, but it has survived and thrived. It's essential to understand that Bitcoin is the world's most scarce digital asset, with a fixed supply of 21 million coins. After its last halving, Bitcoin is set to get more scarcer than gold. Bitcoin has given an astonishing 140% return year on year for the last 15 years. No asset in the history of mankind has given such returns.

In light of Bitcoin's recent price movements, what advice do you have for both novice and experienced investors looking to enter or exit the market?
Rajagopal Menon: The best way is to have a long-term view, typically 5 years. No one who has held Bitcoin for more than 4 years has ever lost money. Systematically buying Bitcoin every month, similar to investing in a mutual fund, can be an effective strategy.

The cryptocurrency market is notoriously volatile. How can investors manage risk in such a dynamic environment, especially during times of rapid price appreciation?
Rajagopal Menon: Bitcoin's volatility is comparable to that of successful public companies like Amazon.com, which has exhibited an 80% volatility rate similar to Bitcoin over its 26-year history. Every year, Amazon has experienced double-digit drawdowns, with an average peak-to-trough decline of 31%. Investors can manage risk by diversifying their portfolios and gradually adding to their Bitcoin positions over time.

Beyond price speculation, what long-term fundamentals support the case for investing in Bitcoin, and how do they influence your investment strategy?
Rajagopal Menon: The long-term fundamentals supporting investment in Bitcoin include diversification benefits and a hedge against inflation. Even a 5% allocation to Bitcoin can significantly enhance portfolio returns. Additionally, as inflation ravages economies and governments continue money printing, savings held in cash are eroding in value. Bitcoin offers a tamper-proof monetary system, providing a store of value and potential appreciation.

Regulatory uncertainty remains a significant challenge for the cryptocurrency industry. How do you assess the impact of regulations on Bitcoin's price trajectory and investor confidence?
Rajagopal Menon: Regulation is inevitable - it's a question of when not if. As per the G20 declaration, all member countries are required to have domestic crypto regulations in place by 2025. While regulatory clarity can potentially increase investor confidence and mainstream adoption, excessive restrictions could hinder growth and innovation. However, governments like India have already begun regulating crypto under existing laws and imposing taxes, signalling the beginning of regulation.

As Bitcoin continues to gain mainstream acceptance, what role do you see it playing in the broader financial landscape, and how does this influence your outlook on its investment potential?
Rajagopal Menon: Bitcoin has recently reached new all-time highs in numerous countries, including Argentina, Burundi, Congo, Egypt, Ghana, Japan, Laos, Lebanon, Malawi, Nigeria, Pakistan, Sierra Leone, Sudan, and Turkey. As more people recognize Bitcoin's advantages and allocate a significant portion of their wealth to this digital asset, its value relative to fiat currencies is likely to continue rising. This growing mainstream acceptance and adoption enhance Bitcoin's investment potential.

Lastly, given the current market conditions, what are your predictions for Bitcoin's price trajectory in the short to medium term, and what factors do you believe will drive these movements?
Rajagopal Menon: 2024 is expected to be a golden year for cryptos. As an election year in many countries, government spending is likely to skyrocket, compelling central banks to reduce interest rates. The US Federal Reserve is most likely to cut interest rates by 25bps in September. The markets will be awash with liquidity and most asset prices including Bitcoin will go to the moon. Additionally, the ongoing institutional adoption and increasing could further fuel its price trajectory in the short to medium term.

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Source: Forex-Markets-Economic Times