Investors are usually keen on adopting the wait-and-watch approach, which means staying clear from making swift yet unnecessary decisions. The strategy is usually implemented by traders or investors when they anticipate significant uncertainty, volatility, or impending information. The patience to stand the storm often fetches the traders significant returns and enables them to make informed decisions that align with their risk appetite and investment goals.
Why do Investors incorporate Wait and Watch?
A “wait and watch” or HODL method could be taken by crypto traders for several reasons. Here are some possible reasons why:
Market Volitality: Cryptocurrency markets are known for having a lot of ups and downs. Prices can change a lot in a short amount of time. Before investing, traders may wait and see how the market is doing, how stable it is, and how prices might change.
Regulatory Uncertainty: Cryptocurrencies are still fairly new, and their rules always change. Before making big moves, traders may be cautious and want to know more about how governmental changes could affect the market.
Market Corrections: It is common for the market to go through corrections or pullbacks after a fast growth or a bull market. Traders may wait for prices to stabilize or settle before getting into or out of positions.
Fundamental Analysis: Some traders like to look at the most important parts of a cryptocurrency, like its technology, rate of adoption, partnerships, and the general mood of the market. They might wait to learn more before making trade decisions based on these factors.
Risk Management: Managing risk is an important part of trading. Traders might be careful and use a “wait and watch” method to limit losses. Before making trades, they might wait to see if trends, levels of support and resistance, or other technical signs are still true.
Why are Indian Crypto Traders Holding BTC?
In 2023, Bitcoin went up by more than 80%, and the market for all cryptocurrencies is now worth $1.19 trillion. Despite the market’s ongoing problems and glitches, like the crackdown on big exchanges like Coinbase and Binance by SEC, Bitcoin has come as a pleasant surprise to everyone. The news around Bitcoin ETFs and HSBC, one of the biggest banks adopting cryptos, has brought a lot of inflow towards the Bitcoin market.
There are a few reasons why Indian crypto traders are holding BTC.
- Hedge against inflation: The Indian rupee has been steadily losing value against the US dollar. This is enough for Indians to look for options to hedge their savings against inflation. Bitcoin, being a cryptocurrency, is not subject to government policy, inflation, or control.
- Long-term investment: Bitcoin is the driving force of the crypto market. Many Indian crypto investors believe that the price of Bitcoin will likely give a bull run in the future, and the prices may steadily continue to rise. The traders are holding BTC in anticipation of making a profit in the future.
- Circumvent capital controls: Recently, the Indian government has imposed strict controls on capital, making it hard for Indians to invest abroad. People see Bitcoin as a way to get around these rules because it can be traded secretly.
Of course, there are also some risks associated with holding BTC. The price of Bitcoin is volatile, and it could lose value in the short term. Overall, the reasons why Indian crypto traders are holding BTC are varied. Whatever the reason, it is clear that BTC is popular among Indian crypto traders.
If the analytics is to be believed, then there is a lot of potential and room for the market to skyrocket, giving investors more reasons to be optimistic and follow the wait-and-watch protocol. Heavy taxation on crypto profits has hurt the investor sentiment of the country’s crypto environment. More on this here. Additionally, to invest in Bitcoin, you can head to LotusX.