Bitcoin Crossed $41,000 Again – Bitcoin is back in the news talking about a 2020 Redux first a mystery illness in China and now a Bitcoin surge it’s like the last two years never happened but they did and this new Bitcoin surge is very different from the last one let me explain how Bitcoin is trading at $41,000 meaning one Bitcoin equals that much $41,000 and why is that important because the last two years have been tough for Bitcoin 2023 and 2022 the last time it was trading above $40,000 was in April last year 2022 and since then it’s been a tumble.
Why is Bitcoin Surging?
The last two years have been tough for Bitcoin. 2023 and 2022 were particularly challenging. The last time Bitcoin was trading above $40,000 was in April 2022. Since then, it’s been a tumble. The lowest point was this time last year, November and December. Back then, one Bitcoin was equal to just $16,000. So, why has it bounced back? Why is Bitcoin up 140% in one year, and should you buy it now?
Three Reasons for the New Surge
There are three reasons for the surge in Bitcoin prices:
Legal uncertainties concluding: The legal uncertainties surrounding Bitcoin are concluding. You may have heard of FTX, one of the largest crypto exchanges in the world, which collapsed. Its founder, Sam Bankman-Fried, has been arrested and found guilty of fraud. He faces up to 100 years in prison. Another crypto boss has cut a deal: Binance Chief Changpeng Zhao signed a $4.3 billion settlement deal with the US government. So, he’s out of the picture. My point is that the bad apples have been sorted, at least they seem to have. It’s like Bitcoin has passed its trial by fire. This is one reason why we’re seeing a surge.
Expected cut in interest rates: The US Federal Reserve stopped increasing lending rates last month and announced a pause. Naturally, the next step is reducing it. Many experts are predicting a rate cut by early 2024. If that happens, it would free up capital. More money will be available for investments elsewhere, like in crypto or gold. Gold is on a bullish run of its own. It has stopped at $2,100 per ounce, a new record for the yellow metal. Here in India, the rates are shooting up. For instance, 10 grams of gold is priced at more than 65,000 rupees. The reason is the same: an expected cut in interest rates across the world. Plus, here in India, it’s wedding season, so the demand for gold is higher anyway.
Talk of a Bitcoin ETF: There is talk of a Bitcoin ETF now. ETF stands for Exchange Traded Fund. ETFs are traded on traditional exchanges like NASDAQ and DOW JONES, not in shady ones like FTX. The Bitcoin ETF tries to avoid the security risks associated with holding Bitcoin on crypto exchanges. It mimics the price fluctuations of Bitcoin while you do not own it. Think of it as a surrogate. So, all the benefits and none of the risks. The US market regulators are thinking about pro-approving such ETFs. They’re in talks with major asset managers like BlackRock and Grayscale. If the approval comes, Bitcoin could be mainstreamed. A lot more money will pour in. So, there you have it: three major reasons why Bitcoin is surging.
Should You Buy Bitcoin Now?
Keep a few things in mind if you’re considering buying Bitcoin:
ETF approval is a big if: At the moment, if the ETF approval comes, great. You can trade Bitcoin like any other stock or fund. But if it doesn’t, it’s a long way down. Chances are the prices will tumble again. So, be mindful of that.
Tax implications: If you’re in India, crypto is now taxed 30% on all profits. That’s the tax plus 1% on sizable transactions. So, invest wisely.
Read Also – Top 6 BEST Crypto Exchanges in 2024: Which Are Safe?
Read Also – What Is Ruby Coin and How Does It Work? 2024
That said, there is no denying that the excitement is back. Just look at Standard Charter, a multi-major multinational bank. It says Bitcoin will reach $100,000 by the end of 2024. That’s a 143% rise from today. Compare that to traditional indices like the Nasdaq, which is up 27% compared to last year, and the Nifty, which is up 10%. So, if the prediction holds, there is serious money to be made. But, of course, this is Bitcoin. It’s the wild west of the financial system. Excitement alone can’t bring investors on board. You need to have clarity like how safe is it, what is the utility, can Bitcoin and crypto eventually be used for transactions, will the government make it risk-proof, etc. All of it needs to be answered. If not, it could be a repeat of the last time. We can’t just trust crypto bros to build the future of money and assets. We need the numbers to check out that.