The year 2024, seemed to have kicked off on a higher notch for cryptocurrencies enthusiasts as Ethereum and Bitcoin started at high levels. On Wednesday, 6th March, 2024 the price of Bitcoin went up surpassing the previous high achieved during Covid-19 period. In short, almost everybody holding Bitcoin has made profit.

Does the surge suggest a long-term upward trend for Bitcoin? Keep reading to get more information on the recent crypto wave. 

What’s New?

Recently, Bitcoin rose in over two years to set a new record. However, the rise was short-lived. But since the year started it has risen above 40%, prompting most investors to secure profits.  

Why Is Bitcoin Surging?

There are various factors leading to Bitcoin recent rally.  The key sign being that big investment companies are about to acquire regulatory approval allowing spot for Bitcoin exchange traded funds. EFTs are a pooled investment security that control the cost of indices or assets including the government bond index and stock index.  

In January, there is expectation that Federal regulators will offer green light for various Bitcoin EFTs. 

The approval will make investing in cryptocurrencies easily accessible to investors and millions will be capable of investing in Bitcoin without directly owning it.

As the world witness more managers invest in the Bitcoin EFT space, the institutional and retail investors including the conservative ones, will feel more confidence investing in the EFTs. 

Additionally, Bitcoin prices are surging due to increasing conviction that Federal Reserve is no longer rising the benchmark interest rate. The inflation is increasing and central bank might adjust the monetary policy to protect the economy by mid-2024. Once the interest rates decline the investors are likely to invest large amount of cash in risky assets including crypto. 

In Numbers

Recently, the steep rise started last week, it was triggered by increase in purchases on a particular exchange. In New York the price spiked up 2.5% to $69,191.95. Wednesday was Bitcoin’s peak where it went up by 63% for 2024.

Since Bitcoin inception, its value has risen wildly. In 2013 it hit $1,000.00 then faced a dip before rising to $68,991.85 November, 2021, this was triggered by global stimulus responses to covid-19.  In 2022 some prominent crypto firms were exposed to regulatory action squeezing the market.  However, the trend reversed and achieved a new record upwards on 6th March. 

But Cryptocurrencies Were Facing Trouble Recently?

There was “crypto winter” that lasted for about two years. Cryptocurrencies experienced similar factors that had huge impacts in the market including stocks. In an effort to lower inflation the Fed was aggressively increasing interest rates sparking fears that the global economy is heading to recession.

Volatility and fraud in Bitcoin and various digital currencies resulted in collapse of several crypto firms including FTX which was leading world’s largest exchanges. Prosecutions and arrests followed creating a sweeping conviction that improved sentiments towards cryptocurrencies. This coupled with a better market optimism seems to eliminate the “crypto winter.”

What Does Current Bitcoin Rise Mean for Investors?

Despite Bitcoin experiencing a huge bull run, there is no specific way to understand to what extent the cryptocurrency will rise before another correction. 

Although it seems like Bitcoin is on a long-term rise, the fact is that we facing unprecedented territory based on various factors such as crypto regulations, economic indicators, geopolitical climate and Fed’s plans on interest rates. 

Generally, investors in cryptocurrency understand that even during the promising periods, it is quite difficult to predict the short-term price action of digital assets. This particularly holds true in the current bitcoin market environment.