Bitcoin price surged past $89,000, reaching a new record high, as investors continue to pour money into the cryptocurrency market following Donald Trump’s reelection. Here are key things to know about the crypto rally.
Cryptocurrency is digital money that operates on an online network without central authority. Bitcoin, the largest and oldest cryptocurrency, has been around for a while but gained popularity recently due to its volatility and potential as an alternative to traditional money.
The recent post-election rally can be attributed to Trump’s pledge to make the US “the crypto capital of the planet” and create a strategic reserve of bitcoin. His campaign accepted donations in cryptocurrency, and he courted fans at a bitcoin conference. Crypto industry players welcomed Trump’s victory, hoping for regulatory changes that would push through legislative actions.
Bitcoin posted notable gains over the past year due to the success of spot bitcoin ETFs, which were approved by US regulators in January. Analysts attribute these gains to an anticipated “crypto-friendly” nature of the incoming administration and a shift in regulatory backing.
However, there are risks associated with investing in cryptocurrency. History shows that crypto assets can experience drastic swings in value, leading to potential losses. Long-term price behavior relies on larger market conditions, making it challenging to predict the future.
Environmental concerns surrounding bitcoin mining also exist. The process consumes significant energy, contributing to greenhouse gas emissions. Industry analysts maintain that clean energy has increased in use, but more work needs to be done to address climate impacts.
Investors should approach cryptocurrency with caution, particularly small-pocketed investors, as history shows rapid price swings and potential losses. Experts stress the importance of only investing money they can afford to lose.
Source: https://apnews.com/article/bitcoin-price-record-trump-election-rally-crypto-9a22f5b5ce24824d7df5a3ab4a58e8a0