Bitcoin has been one of the top headlines in 2024 after initially struggling earlier this year. However, it has now rallied in a high-interest-rate environment, breaking away from the rest of the crypto sector. The token is up almost 50% since November 5th and has surged past $101,000.
The reason behind Bitcoin’s surge can be attributed to the incoming Trump administration’s stance on cryptocurrency regulation. Trump has vowed to make the US the “crypto capital of the world” and has nominated several pro-crypto individuals to head key agencies that oversee crypto matters. This shift in policy has given investors confidence, with Coinbase’s chief policy officer Faryar Shirzad predicting that crypto legislation can move through Congress fairly quickly.
Additionally, Bitcoin has benefited from a growing consensus that it can hedge against inflation. As the world’s largest cryptocurrency, Bitcoin is a scarce asset similar to gold, making it attractive as an investment option. Federal Reserve Chair Jerome Powell has likened Bitcoin to digital gold, and BlackRock has issued a report suggesting investors can allocate up to 2% of their portfolio in Bitcoin.
However, experts also warn that investors should be aware of the broader risks associated with Bitcoin, including volatility and the possibility of it not gaining widespread adoption. As such, dollar-cost averaging when buying Bitcoin may be recommended, which involves investing a set amount of money over regular intervals to smooth out costs over time.
The author believes that Bitcoin is a good long-term asset to have some exposure to due to its relatively short history and ability to thrive in different interest rate environments. With the Trump administration’s favorable stance on crypto regulation, now may be an opportune time for investors to consider buying Bitcoin under $115,000.
Source: https://www.fool.com/investing/2024/12/17/should-you-buy-bitcoin-below-115000