India Today Updates

Why is Bitcoin at its Highest Point Ever? Will It Keep Rising? Is It Time to Invest?

<p>Right now, bitcoin is worth more than before. It reached an all-time high of $68,900, the highest price in its fifteen-year existence, and had a $1.35 trillion market capitalization.</p>
<p>Analysts are not shocked by the abrupt increase and fall of the cryptocurrency, which is thought to be the most volatile. It fell below $17,000 after the collapse of Bankman-Fried’s FTX in November 2022.</p>
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<p>Farside Investors data shows that since the Securities and Exchange Commission approved Bitcoin ETFs at the start of the year, their value has increased to an impressive $6.7 billion. According to a Forbes study, these Bitcoin ETFs are averaging around $210 million in daily inflows.</p>
<p><strong>Why, then, is Bitcoin increasing?</strong><br />
The allocation of institutional players, increasing retail involvement as a result of Spot Bitcoin ETFs and the impending Bitcoin Halving event have been the main causes of the price spike.</p>
<p>When interest rates dropped during the epidemic and more individuals were able to readily borrow money and invest it, bitcoin saw a surge. Bitcoin decreased and interest rates shot through the roof after Russia’s invasion of Ukraine.</p>
<p>Even if interest rates are still high at the beginning of 2024, the Federal Reserve said in December that it would not lower rates in favor of hikes. As a result, inflation progressively dropped and the US economy strengthened, creating almost 353,000 new jobs in January.</p>
<p>Nine bitcoin exchange-traded funds (ETFs) hit the market in January, and on the first day of their availability, $4 billion was traded.</p>
<p><strong>Is the price continuing to rise?</strong><br />
Analysts predict that in 2024, the price of bitcoin will keep rising. A group at Deutsche Bank headed by economist Marion Laboure said, “We expect prices to go even higher this year,” listing a few reasons.</p>
<p>The first is spot Bitcoin exchange-traded funds (ETFs), which were authorized in the US in January and are responsible for the most recent leg of the cryptocurrency rise, according to a comment from Barron’s. The fact that these funds purchase and retain Bitcoin itself means that their inflows may mechanically affect prices.</p>
<p>Another is that, with robust economic growth and a spike in the biggest tech equities like Microsoft and Nvidia, the US economy may potentially serve as a catalyst for further cryptocurrency increases, according to Deutsche Bank.</p>
<p>Laboure said, “It is anticipated that central banks will begin to reduce interest rates from the decade-high levels observed in 2022, which will fuel rising risk appetite and increased market liquidity.”</p>
<p>The cryptocurrency market is doing well, but investors should be cautious since volatility may cause money to disappear very rapidly.</p>
<p><strong>Is investing in cryptocurrency a wise decision?</strong><br />
In India, cryptocurrency regulation is still lacking. The Reserve Bank of India oversees banking transactions, while Sebi oversees investments in stocks and derivatives; as of now, there is no regulation for cryptocurrency transactions.</p>
<p>Investors are encouraged to exercise caution in light of the recent spike in the price of Bitcoin caused by the launch of the Bitcoin ETF. Investors face substantial problems due to regulatory uncertainty in over 190 countries, as shown by Nigeria’s recent crackdown on cryptocurrency transactions, according to Gaurav Mehta, co-founder and CEO of Catax—Simple Crypto Taxes—who was cited by Livemint.</p>
<p>Even the legendary investor Warren Buffett has strong opinions on bitcoins. Once upon a time, the Oracle of Omaha said he would not purchase bitcoins, even if they were all available for $25.</p>

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