Bitcoin’s value has soared in 2024, hitting all-time highs. Regulatory approval of spot bitcoin ETFs and optimism after Donald Trump’s presidential win has fueled its rise. But with its volatility, experts advise caution for new investors.
Record High Prices:
- Hit $70,000 in March after SEC approval of spot bitcoin ETFs.
- Reached $80,000 post-election and now trades above $90,000.
- Support from the Industry:
- Advocates see bitcoin as a path to generational wealth.
- Calls for the US to create a strategic bitcoin reserve are growing.
- Volatility Remains High:
- Bitcoin dropped 75% between November 2021 and November 2022.
- Not a stable option for short-term financial goals or legal tender in most places.
- Advisers’ Caution:
- Recommended investment: 3-5% of a portfolio, if any.
- Avoid using bitcoin for critical goals like college savings or buying a home.
- Diversify with a “core and explore” strategy: 95% in safer assets, 5% in bitcoin.
- Questions Before Investing:
- Can you handle a 50% or more drop without financial strain?
- Do you have a clear exit strategy to avoid emotional decisions?
- Safer Investment Options:
- SEC-regulated spot bitcoin ETFs offer secure exposure.
- Nearly $28 billion invested in bitcoin ETFs with $96 billion in combined net assets.
Bitcoin’s rise has reignited interest in crypto investing, but its risks remain significant. Experts recommend cautious, limited exposure and safer routes like ETFs for those venturing into this volatile market.
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