“The exponential growth of Bitcoin prices this year has surpassed all expectations, and with the emergence of innovative investment methods, the potential for even higher prices seems limitless.”
Bitcoin, the world’s largest cryptocurrency, has reached a new milestone, soaring to almost $35,000 this week. This marks its highest point in nearly 18 months and is more than double its price at the start of 2023.
Bitcoin’s journey has been a rollercoaster ride. It skyrocketed from just over $5,000 at the start of the pandemic to nearly $68,000 in November 2021 during a period of massive tech growth. However, it experienced a significant drop due to aggressive rate hikes from the Federal Reserve and the collapse of FTX, one of the biggest companies in the crypto industry. At the beginning of 2023, a single bitcoin was valued at less than $17,000, losing more than 75% of its value.
But investors have been returning to bitcoin this year as inflation started to cool. The collapse of prominent tech-focused banks also led more investors to turn to crypto as they sought more stable investments. Now, bitcoin is receiving another boost with the possibility of bitcoin exchange-traded funds (ETFs) being launched. ETFs are pooled investment securities that can be bought and sold like stocks. The approval of bitcoin spot ETFs would make it easier for anyone to enter the cryptocurrency market, potentially attracting a larger pool of investors.
While federal regulators have not yet given the green light for bitcoin ETFs, recent wins for some crypto fund managers with applications for bitcoin spot ETFs have improved the odds for approval. The District of Columbia Court of Appeals has ordered the Securities and Exchange Commission to reconsider the ETF for Grayscale’s bitcoin fund, signaling a potential shift in the regulatory landscape.
The listing of BlackRock’s iShares Bitcoin Trust by the Depository Trust and Clearing Corporation has also gained attention. These developments, combined with social media chatter and misinformation, have contributed to the recent surge in bitcoin’s price. However, experts warn that crypto remains a risky investment. The volatility of the asset class can lead to unpredictable fluctuations in value, and investors can lose money as quickly as they make it.
The collapse of FTX has also shaken public confidence in the crypto industry, and institutional money, such as hedge funds, now dominate the market. While interest in crypto is returning, it is not the same as before, and future regulation will play a significant role in shaping the industry.
While the recent surge in bitcoin is exciting, it is uncertain if it will be sustained. A regulatory green light does not guarantee continued gains. The market will closely watch how trading volumes and investor interest unfold once bitcoin ETFs are approved.
As of now, the price of bitcoin stands at $34,789.