What happened
The crypto crash continues on into Monday. Despite some positive signs from yesterday, which saw a rebound in many top tokens, investors saw fit to resume selling on Monday. As of 11:30 a.m. ET, top cryptocurrencies Cardano (CRYPTO:ADA), Chainlink (CRYPTO:LINK), and The Sandbox (CRYPTO:SAND) declined 6.5%, 6.2%, and 9.1%, respectively, over the past 24 hours.
Macro headwinds continue to batter the crypto sector, with cryptocurrencies trading in line with stocks, which are seeing incredibly bearish sentiment take hold today. Prospective interest rate hikes on the horizon have cooled demand for higher-risk assets, with investors largely seeking out safe havens today. Additionally, last week, a paper from the Russian central bank highlighting a plan to ban all cryptocurrencies was not met favorably by investors over the weekend.
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As far as token-specific catalysts go, a recently released Cardano-based decentralized exchange, SundaeSwap, has reportedly seen technical issues after its go-live this past week. This has hurt the otherwise bullish sentiment this environmentally friendly proof-of-stake blockchain network has seen of late.
Chainlink’s oracle network and The Sandbox’s metaverse/gaming orientation haven’t provided strong enough tailwinds to overcome the hurricane-force winds this market is providing right now. Investors appear to simply be rotating out of risk-on sectors, even if it means selling some of the best tokens in their respective niches today.
So what
Cardano, Chainlink, and The Sandbox are three cryptocurrencies many experts believe are among the highest-quality tokens in their peer groups. Those intrigued by the growth prospects of crypto in general certainly have reason to consider these tokens on dips such as these.
Right now, the question many investors are asking is whether the recent declines we’ve seen across quality stocks and cryptocurrencies have fully priced in the risks the market expects to see in the near term. If not, we could be in for a bumpy ride moving forward.
Now what
Investing in any asset involves some level of risk. Volatility in asset prices will always exist, and some assets are more volatile than others. For those with a shorter investment time frame (say, for those entering or nearing retirement), holding highly volatile assets during years when capital may be required to support one’s lifestyle may not be prudent.
However, for those with a longer investment time horizon, and who are able to handle the mental agony short-term volatility can provide, perhaps now is a great time to start shopping for quality stocks and cryptocurrencies. Sure, the market is in a frenzied sell-off mode. It’s likely this isn’t the bottom, and there’s more room to fall.
However, when there’s extreme fear in the market is typically when the levelheaded, long-term investors come out of hibernation and start buying.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
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