Bitcoin has surged more than 160% this year. Is cryptocurrency winter over?

This time last year, cryptocurrency investors were wondering if the dark winter would ever end. Popular cryptocurrency platform FTX just collapsed and Bitcoin (BTC) erased most of the gains of the past few years. Some wondered whether the emerging cryptocurrency market could ever recover.

Today I will tell you a different story. The grandfather of cryptocurrencies has surged more than 160% since the beginning of the year. Bitcoin opened at about $16,540 on January 1 and was worth nearly $44,000 at the time of this writing, according to CoinGecko data.

Is cryptocurrency winter over?

There is currently cautious optimism about Bitcoin and cryptocurrencies. The upward trend continued despite economic uncertainty and severe regulatory headwinds. Although the Bitcoin price has not reached the highs seen in November 2021, it has shown some resilience. The Crypto Fear Greed Index, which measures market sentiment, has been in the greed zone for over a month now.

One of the biggest drivers of Bitcoin’s recent rise is hopes that the SEC may approve a spot Bitcoin exchange-traded fund (ETF) in 2024. So far, the SEC has consistently refused to approve spot Bitcoin ETFs. But many observers think a change of heart will occur next year.

Earlier this year, an appeals court ruled that the SEC had no basis to reject the EFT proposal. The SEC did not appeal the ruling, which sparked speculation it could give approval to one (or several) of the applications currently in the pipeline.

Spot Bitcoin ​ETFs could significantly change the cryptocurrency landscape. Investors no longer need to purchase Bitcoin on cryptocurrency exchanges. Instead, they can use their brokerage account to purchase shares of an ETF that owns Bitcoin. It will become much easier for both retail and institutional inventors to own the best cryptocurrencies.

Is it safe to buy Bitcoin in 2024?

During the cryptocurrency craze of 2020 and 2021, many Americans purchased cryptocurrency for the first time. Soaring prices have created a feeling that the market has no choice but to rise. Speculation was rampant. Unfortunately, many retail investors lost money in the subsequent crash, which saw Bitcoin lose about half its value in six months.

If you’re wondering if it’s safe to buy Bitcoin in 2024, the short answer is that cryptocurrencies are a risky asset class. This is still a relatively new and unregulated industry, and there are many unknowns about how it will unfold. Some questions to consider include:

• Are you satisfied with the volatility? The price of Bitcoin fluctuates significantly. It rose over 300% in 2020, rose another 60% in 2021, and fell only 65% ​​in 2022. It is not uncommon for the price of Bitcoin to move 20% in a matter of days, which can be difficult for some investors to see. stomach.
• How do you plan to store your Bitcoin? If you don’t want to move your Bitcoin to a cryptocurrency wallet, check what could happen to your funds if the exchange you use fails. Cryptocurrency exchanges do not offer the same protections as bank or brokerage accounts.
• How do cryptocurrencies fit into the rest of your portfolio? There are a variety of investments to choose from, so make sure cryptocurrencies only make up a small portion of your portfolio. That way, you can profit if Bitcoin hits the moon, but your wealth-building plans won’t fall apart if it doesn’t succeed.
• How do you think Bitcoin will perform in the long term? Short-term speculation rarely pays off, so try to understand the long-term potential use cases for Bitcoin. Some people argue that Bitcoin could become the default currency of the Internet. Others believe it could take a slice of the global remittance market or become a currency for emerging markets. Critics believe it has no intrinsic value.
• Are you satisfied with the cryptocurrency regulatory situation? Most cryptocurrencies are currently considered commodities and fall under the jurisdiction of the CFTC. The SEC has prosecuted several major cryptocurrency exchanges this year, establishing that many cryptocurrencies are in fact unregistered securities. At the same time, it is likely that at some point the government will introduce a regulatory framework for cryptocurrencies. But now there’s a lot of noise but not much certainty, which has some investors concerned.

Personally speaking, Bitcoin and other cryptocurrencies continue to make up a small portion of my broader investments. But I am concerned about the regulatory environment and questions about what is happening (or have Continued) Behind the scenes of various cryptocurrency platforms. Although the price of Bitcoin recovered after the FTX collapse, the stain of fraud and extreme mismanagement remains for me.

main points

Bitcoin’s 150% rise in 2023 is good news for cryptocurrency investors. But don’t assume that just because cryptocurrency winter is over, it’s safe to enter the cryptocurrency market. Bitcoin still has many significant hurdles to overcome. These include a changing regulatory environment, bruised investor confidence, and questions about its usefulness. Do your research before you jump in.

WARNING: The highest cash back card we’ve ever seen has a 0% introductory APR until 2025.

Using the wrong credit or debit card can result in serious costs. Our experts love this top pick, which features 0% introductory APR for 15 months, crazy cashback rates of up to 5%, and no annual fee, all of it.

In fact, this card is so good that our experts even use it personally. Click here to read the full review for free and apply in just 2 minutes.

Read reviews for free