“The meteoric rise of Bitcoin prices, doubling in value this year, signals a remarkable opportunity for both seasoned and novice investors. With the emergence of innovative investment options, the potential for even higher price surges in the future becomes increasingly tantalizing.”
Bitcoin is once again making headlines as it reaches its highest point in nearly 18 months. The world’s largest cryptocurrency soared to almost $35,000 this week, more than double its price at the start of 2023.
Bitcoin experienced a significant surge in value during the pandemic, going from just over $5,000 to nearly $68,000 in November 2021. However, prices came back down due to rate hikes from the Federal Reserve and the collapse of FTX, one of the biggest companies in crypto.
Investors started returning to bitcoin this year as inflation cooled down, and the collapse of tech-focused banks led more investors to turn to cryptocurrencies. Now, the prospects of creating a larger pool of investors through bitcoin exchange-traded funds (ETFs) are giving bitcoin another boost.
ETFs are pooled investment securities that can be bought and sold like stocks. Their potential approval by federal regulators could make it easier for anyone to enter the world of cryptocurrencies, while also reducing some of the risks associated with investing in them.
Although a green light from regulators has not yet arrived, recent wins for some crypto fund managers with applications for bitcoin spot ETFs have improved the chances of approval in the coming months. For example, the Securities and Exchange Commission was ordered to reconsider the ETF for Grayscale’s bitcoin fund by the District of Columbia Court of Appeals.
Additionally, the listing of BlackRock’s iShares Bitcoin Trust by the Depository Trust and Clearing Corporation has gained attention and may have contributed to this week’s surge in bitcoin prices.
However, it’s important to remember that investing in cryptocurrencies still carries risks. Bitcoin is known for its volatility, with unpredictable fluctuations in value. The collapse of FTX also affected public confidence in the crypto industry and retail investors.
While interest in cryptocurrencies is returning, it’s not the same as before. Institutional money, such as hedge funds, now drives the majority of crypto investing. The future of regulation is uncertain, and it remains to be seen if the approval of spot ETFs will lead to sustained interest and trading volumes.
Despite the recent excitement, the price of bitcoin is not guaranteed to keep rising. A regulatory green light does not promise continued gains. It’s crucial to monitor how future regulation unfolds and to consider the risks associated with investing in cryptocurrencies.
As of now, the price of bitcoin stands at $34,789.