Bitcoin's success has revolutionized the world of finance, growing from a niche digital currency to a global phenomenon. Founded in 2009, it has been recognized for its decentralized nature, offering an alternative to the traditional banking system. Bitcoin, as both a store of value and a medium of exchange, has attracted widespread interest from investors, institutions, and even governments, including the interest of President-elect Donald Trump.
Bitcoin value continues to reach record highs
Bitcoin is currently on track to record its best monthly performance since February. Trump's recent election has increased its value by 45%. This increase in value is likely due to the election of pro-cryptocurrency members to Congress, including Mr. Trump himself. This shift in political influence will lead to increased trust in the crypto market, and increased support for crypto-friendly policies will accelerate mainstream adoption of digital currencies, increasing Bitcoin's price and status as a leading asset. may be further strengthened.
Bitcoin's value has more than doubled since the beginning of this year. The approval of a U.S.-listed Bitcoin exchange-traded fund (ETF) in January also helped boost the market. Bitcoin has risen a whopping 130% this year. “The reality is that the longer you have been around, the more seriously you will be taken,” said Shane Oliver, chief economist and head of investment strategy at AMP Sydney. It's anyone's guess. However, there is definitely a momentum aspect, and the momentum is increasing at the moment. ”
Bitcoin will soon reach $100,000
Bitcoin broke through the $75,000 level in early November with the election of President Trump. On the 21st, it finally approached the $100,000 ceiling. Despite the apparent growing success of cryptocurrencies, many people still have doubts about them. However, policy developments regarding Bitcoin, such as the approval of a US-listed Bitcoin ETF in January, may help boost public confidence.
“There has never been an ETF like this before,” said Rick Edelman, founder of the Digital Asset Council. “There are ETFs that invest in the stocks of companies that operate in the cryptocurrency industry, such as exchanges and miners, and ETFs that trade Bitcoin futures, such as purchasing stock options instead of stocks, but until now, none have existed. I didn't. Any ETF that invests directly in Bitcoin and owns Bitcoin will do.”
Want to buy Bitcoin? Here's what you need to know
If you're trying to warm up to the idea of adding Bitcoin to your investment portfolio, there are a number of things to consider. Bitcoin and other cryptocurrencies are considered speculative investments, and people invest in them in the hope that their value will rise quickly. Although these assets are highly volatile and investors hope to profit from price fluctuations, they also involve significant risks.
“Typically, the way we think about financial assets is that they're providing capital to a company,” says Michael Finke, a professor of wealth management at the American College of Financial Services. “A company uses its capital to make something, people buy it, and that makes a profit. You can value a company based on its expected future profitability. In the case of Bitcoin, nothing valuation is completely speculative.”
Bitcoin's price has soared more than 600% in the past five years, but it's different from traditional investments such as stocks. Unlike companies that develop products and pay dividends, Bitcoin's value is primarily speculative and has limited real-world use. Additionally, the wealth created by the stock market often comes from reinvested dividends, which compound over time and allow for steady growth. Bitcoin, on the other hand, does not have similar opportunities for compounding or reinvestment.
