Recently, Bitcoin attained a new all-time high and surpassed its previous record of November 2021. The largest cryptocurrency went beyond $73,000 for the first time since its inception. For many, this new rally ignites a renewed interest in cryptocurrency investment. Below, we will explain the circumstances surrounding Bitcoin’s new all-time high and how to know when to invest its best to invest.
The Rise of Bitcoin and ETFs
About a year ago, many people who knew about cryptocurrency were not confident in its reliability and safety. However, the price began to rally around late 2023 when the federal appeal court said the SEC wrongfully rejected Grayscale’s investment application to convert its Bitcoin Trust to spot Bitcoin ETF. In January of 2024, the SEC approved several exchange-traded funds known as spot Bitcoin ETFs.
With the decision, investors now have access to Bitcoin without needing to go through crypto exchanges or deal with the challenging nature of security and storage issues. Now, investors can get Bitcoin easily by just owning a share in their brokerage accounts and IRAs. This safety is one of the factors that have spurred the rally of Bitcoin in recent months.
Bitcoin Halving
The Bitcoin halving event has taken place every four years since its inception. The halving doesn’t affect holders of the coin, but the behind-the-scenes activities could positively affect the future value of the asset. While the event happens every four years, there is no particular date for the next halving. Experts can only predict based on the last date, and many predict that it might occur in mid or late-April 2024. This halving will continue till the total Bitcoin supply is mined.
Is it Right to Buy Bitcoin Now?
With the emergence of bitcoin ETFs and Bitcoin halving close by, is now a good time to invest in Bitcoin? Previous instances of the halving events have made the asset soar considerably. With the last halving event in May 2020, Bitcoin added $2,000 to its value in the next three months. But there are various reasons why Bitcoin rises or falls, and sometimes, they don’t always make sense.
However, many experts are very bullish this year, with Bitcoin spot and halving events being the major explanation. Since the ETF, the demand for Bitcoin products has grown exponentially. BlackRock alone is about to surpass about $5 billion in assets in about 23 trading days. This places them in the top 7% of every ETF due to its size. This shows that the demand for Bitcoin is already outpacing the available supply.
Additionally, more investors intend to buy Bitcoin instantly, adding them to their assets. This shows that many are expecting a price increase during the halving. With this, there might be a reduction in the production of new Bitcoin after the halving event, which will only further drive demand. However, like every other type of investment, investors are not guaranteed a moonshot.
Endnote
Ultimately, deciding to invest in Bitcoin should be a personal decision, whether you intend to buy the digital asset or buy ETFs. Whenever you decide to invest, ensure your portfolio is diversified just like index funds. You should not invest in speculative assets where you can’t afford to take losses. So, before you buy, think of the motivations behind it. Do you believe in its long-term investment potential? Or is it due to fear of missing out?
