Bitcoin: a speculative and risky asset that will try to set new records in 2024

Bitcoin

Posted by MoneyController on 20.11.2023

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According to some traders, bitcoin could reach an all-time high in 2024, but it remains a speculative and risky asset for investors.

Cryptocurrency winter between 2022 and early 2023

A year ago, bitcoin and the cryptocurrency world were still in what some analysts called the 'cryptocurrency winter'. The price of cryptocurrencies - with one bitcoin trading at around $16,000 - had suffered a fate similar to that of equity and bond markets, which had come under pressure from the rising interest rate cycle. After an initial recovery, the failure of Sam Bankman-Fried's FTX platform in March 2023 had shaken the entire cryptocurrency ecosystem.

Reasons for bitcoin's strength

Despite all this, including further interest rate rises, bitcoins have returned to growth: from $16,000 in November 2022, their unit value today exceeds $37,000, an increase of over 128%. As we read in 'La Stampa', the reasons that have pushed bitcoins up, especially in recent months and weeks, are mainly two: rumours about the SEC's approval of an ETF on bitcoins by iShares (Blackrock) and the possible peak of interest rate hikes by central banks (especially the Federal Reserve).

Towards a new price record?

Bitcoins are the world's largest cryptocurrency by market capitalisation: $727 billion, compared with $243 billion for Ethereum, for example. There is no shortage of optimistic forecasts from analysts and operators: as we read again in 'La Stampa', Grand View Research predicts that the bitcoin market will grow by 26% a year until 2050; on the basis of some technical considerations (such as the so-called 'halving'), the head of Southern Europe for 21Shares, Massimo Siano, believes that in 2024 the price could even exceed its historical highs and be worth between 70,000 and 100,000 dollars per unit.

Risky, speculative assets under increasing regulatory scrutiny

However, there is no shortage of analysts who believe that bitcoins are too speculative an asset to be considered attractive from an investment perspective, especially for retail investors. In this regard, 'La Stampa' mentions a book by Gianluigi De Marchi, 'Pinocchiocoin', which explains how bitcoins and cryptocurrencies are now almost useless as a means of payment. At the same time, they are fueling a market for illicit trade (from weapons to drugs), which has led regulators to increase their scrutiny of cryptocurrency platforms and markets. Among the platforms most affected by this regulatory scrutiny (especially in the US) is Binance, which has even been sued by the SEC.

Read also

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Bitcoin ETF: Will US approval send price soaring further?

What is a bitcoin (and other crypto) ETF?

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