Bitcoin, the largest cryptocurrency on the market, has been gaining momentum again since the fall of 2023. At time of writing a single coin is worth $61,728.40. There are several reasons why the crypto currency is currently doing so well.
First is the recent approval of listed bitcoin funds – called spot ETFs or trackers – by stock market watchdog SEC in the US. Investors can invest in BTC through these without having to effectively buy the currency themselves. According to De Tijd more than $6 billion has already been invested in those funds.
Furthermore, there is a ‘halving’ coming in April. This is the built-in system where the reward for issuing new bitcoins is halved, slowing the supply and historically boosting the price each time.
However other cryptocurrencies are gaining ground on Bitcoin.
Rival coin Ethereum’s price is currently hovering around $3,350. That’s the highest level since April 2022. That crypto currency was worth just over $4,600 at its peak – November 2021.
Meanwhile, the market value of the entire crypto market is $2.25 trillion. That’s more than the gross domestic product of Italy ($2.1 trillion), the European Union’s third-largest economy.
While Bitcoin is trading strongly it has yet to reach the heady days of 2021 when it was briefly worth $69,000. Since then, the crypto market went into a downward spiral. This was partly due to the collapse of crypto exchange FTX. At its low point, the price had dropped to around $16,600. So in recent months, the situation has turned dramatically.
This raises the question: is a new record in the making?
Crypto asset manager Bitwise expects the price to peak at $88,000 this year to eventually close 2024 at $77,000. Other experts are also convinced that the previous record will fall this year. “Bitcoin is gaining popularity as a safe haven in countries with persistently high inflation,” said Alex Kuptsikevich, analyst at trading platform FxPro, in an interview with Euronews . “Macroeconomic risks this year make it relevant to buy crypto, gold and silver.”
But not everyone is as enthusiastic about cryptos.
The European Central Bank (ECB) still warns that bitcoin has no value. “The recent US approval of some bitcoin ETFs may give consumers the impression that BTC is a safe investment,” a blog post echoes. “It reinforces the belief that the past price surge is evidence of an unstoppable triumph.”
The ECB adds that bitcoin could not deliver on its original promise to become a global decentralised digital currency. “Bitcoin transactions are still inconvenient, slow and expensive,” it echoes. “Moreover, outside the darknet, the hidden part of the Internet used for criminal activities, the digital currency is hardly used for payments.”
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