The value of Bitcoin has reached a new all-time high, surpassing the previous record set in November 2021. This surge in price has been driven by major US financial institutions investing billions in the cryptocurrency. However, financial experts warn that the volatile nature of crypto assets could lead to significant price fluctuations.
Bitcoin, created in 2009 by an unknown individual or group called Satoshi Nakamoto, was initially designed as a decentralized alternative to traditional financial systems. But with the recent influx of institutional investors like Blackrock and Fidelity, the value of Bitcoin has skyrocketed.
The approval of spot Bitcoin Exchange-Traded Funds (ETFs) by US regulators in January 2024 has enabled large investment firms to purchase significant amounts of Bitcoin, pushing its price higher. Professor Carol Alexander from Sussex University believes that these institutional investors are driving up the price of Bitcoin.
Despite the current surge, experts anticipate that Bitcoin’s upcoming “halving” event in April could impact its value. Historically, such events have led to price surges in the past. The cryptocurrency rose to over $69,000 before dipping back to around $67,000, marking a 50% increase in value over the last month.
While many Bitcoin holders may be celebrating their newfound wealth, they should remain cautious as the cryptocurrency’s value has experienced wild fluctuations in the past. In June 2022, Bitcoin plummeted to nearly $20,000, and later faced additional challenges when the FTX exchange collapsed in November 2022.
Despite its volatile nature, Bitcoin has gained attention from global leaders like El Salvador’s president Nayib Bukele, who has invested over $100 million of public funds into the cryptocurrency. As Bitcoin continues to attract institutional and individual investors, its value remains subject to rapid changes in the market.
