6 C
London
Monday, December 23, 2024

Bitcoin’s Surge Past $100k: Can It Continue?

Bitcoin has surged past the $100,000 mark, raising questions about its future. The price reached about $103,400 at 04:00 GMT on Thursday, before dipping slightly. Many attribute this spike to Donald Trump’s election victory, which has fueled optimism among investors.

Trump’s Impact on Bitcoin’s Price

Dan Coatsworth, an investment analyst at AJ Bell, called the milestone a “magic moment” for Bitcoin. He pointed out a strong link between the rise in price and Trump’s election. After his victory, Trump posted a message on social media, congratulating Bitcoin investors and declaring, “you’re welcome!”

Before the election, Trump had promised to make the U.S. the “crypto capital” of the world, a move seen as favorable to Bitcoin’s growth. His announcement about nominating Paul Atkins to head the SEC also played a role. Atkins is known for his pro-cryptocurrency stance, unlike the current SEC chair, Gary Gensler, who has been less supportive of the crypto market.

Experts believe that Bitcoin’s recent rise is tied to expectations that the new administration will be more crypto-friendly. Andrew O’Neill from S&P Global noted that this trend is likely to continue into the new year.

The Risks and Uncertainty of Bitcoin

However, Bitcoin is known for its volatility, with sharp price fluctuations a constant concern. Coatsworth cautioned that Bitcoin remains a high-risk investment, saying it’s driven by speculation and unpredictable trends. He warned that this unpredictability makes it unsuitable for everyone, especially those seeking stable investments.

Trump’s victory and his stance on cryptocurrency are just a few factors influencing Bitcoin’s price. The SEC’s approval of Bitcoin exchange-traded funds (ETFs) has also helped boost investor confidence. Major firms like Blackrock and Fidelity have entered the market, bringing in billions of dollars.

Despite this optimism, Bitcoin’s volatility remains a major risk. In 2022, its price dropped sharply below $16,000 after the collapse of the FTX exchange. Investors should keep in mind that there is no protection for losses in the cryptocurrency market.

FOMO and Caution for Investors

Experts like Carol Alexander from Sussex University suggest that fear of missing out (FOMO) among younger investors could continue driving Bitcoin’s price higher. However, she cautioned that many younger investors, particularly those in meme coins, are losing money.

Kathleen Breitman, co-founder of Tezos, also warned potential Bitcoin investors to be cautious. She stressed that Bitcoin’s market moves on momentum, meaning caution is essential for anyone considering it as an investment.

Latest news
Related news

LEAVE A REPLY

Please enter your comment!
Please enter your name here