Bitcoin reaches all-time high of $72,000, should you invest?
According to CompaniesMarketCap, bitcoin has also been placed ahead of silver (valued at $1.387 trillion) due to recent rally.
Also read: Bitcoin market cap surpasses Silver to take eighth spot in global asset rankings
What is driving the rally?
The recent surge in momentum can be largely attributed to the successful launch of spot Bitcoin exchange-traded funds (ETFs) in the United States on January 11. These ETFs, spearheaded by prominent financial entities like BlackRock Inc. and Fidelity Investments, have collectively garnered approximately $9.5 billion in net inflows.
Furthermore, developments in other regions contribute to this momentum as well. In the United Kingdom, the London Stock Exchange announced its willingness to consider applications for Bitcoin and Ether exchange-traded notes. Similarly, Thailand’s securities regulator indicated its intention to allow retail buyers access to overseas crypto ETFs.
In the UK, the London Stock Exchange (LSE) disclosed its readiness to receive applications for Bitcoin and Ether exchange-traded notes. Meanwhile, Thailand’s securities regulator indicated its intention to allow retail buyers access to overseas crypto ETFs.
Also read: Bitcoin surge: Why should you still not invest in cryptos? These are 7 key reasons
“The current crypto market rally has taken even the most optimistic crypto supporters by surprise, as the price is being driven by the massive institutional interest, in the form of strong inflows into the recently launched Spot Bitcoin ETFs in the US,” said Parth Chaturvedi, Investments Lead, CoinSwitch Ventures.
Should you invest?
Chaturvedi further said, ” The crypto market is already seeing a surge in volumes. However, retail participation is still nowhere close to the mania seen in 2021. We can expect interest in crypto as an asset class to become more mainstream.”
The recent rally in Bitcoin price and significant developments like the SEC’s approval of Bitcoin ETFs and the impending Bitcoin Halving have indeed spurred a renewed interest in crypto.
These milestones are attracting both new and seasoned investors, injecting smart capital into the market. However, considering crypto is a new asset, investors must start with a modest allocation and focus on blue-chip crypto assets such as Bitcoin and Ethereum, say experts.
“Considering crypto is a new asset, investors must start with a modest allocation and focus on blue-chip crypto assets such as Bitcoin and Ethereum. These assets are generally less volatile and address real-world problems, making them attractive for long-term investment strategies. Maintaining a well-diversified portfolio within the crypto asset class is paramount for investors with some exposure and a solid portfolio. Diversification helps spread risk across different assets, mitigating the impact of adverse price movements on the overall portfolio. Remember the age-old advice: don’t keep all your eggs in one basket,” Sumit Gupta, co-founder, CoinDCX, told Livemint.
Gupta further added, “ Employing risk management strategies such as setting clear investment goals, using stop-loss orders, and regularly reviewing and rebalancing your portfolio based on market conditions can help mitigate risks.
For long-term investors, strategies like HODL (Hold On for Dear Life) have proven rewarding in crypto like assets like Bitcoin and Ethereum. Additionally, we at CoinDCX offer a range of products such as Crypto Systematic Investment Plans (Crypto SIP) and Earn programs, providing structured approaches to accumulating assets over time.”
According to Rajagopal Menon, VP WazirX, the demand for bitcoin is far outstripping supply. “Bitcoin has relentlessly ascended to $72,000; ETFs are gobbling up 10,000 Bitcoin a day on an average when production is just 900 a day. Whales like Michael Saylor’s MicroStrategy are leading the charge by acquiring an additional 12,000 Bitcoin, demand far outstripping supply. Bitcoin is up by +71.24% year to date; while retail investors are taking a cautious approach, it’s only a matter of time before they start adding BTC to their investment portfolios,” Menon told Livemint.
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Published: 12 Mar 2024, 10:17 PM IST
