Bitcoin is rallying again: Over the past few weeks, the value has risen from below $6,700 in April to just shy of the $10,000 mark. However, it still has a long way to go to reach the high of more than $19,000 reached in December. The question now is: Will Bitcoin continue to rise?
Will Bitcoin Continue to Rise?
To understand whether Bitcoin will continue to rise, you first need to know why it fell so dramatically in the first place.
Over the past year or so, the cryptocurrency landscape changed. Countries began exploring regulations, and banks began restricting the use of credit cards to purchase cryptocurrencies.
Overall, these developments harmed Bitcoin and other cryptocurrencies that are available today. But then things turned around more recently with some positive events that sent the value back up again.
Among the more significant of them, Goldman Sachs stated it was working on setting up a desk for cryptocurrency trading.
Regulators have also required cryptocurrency exchanges to register with entities like the Securities Exchange Commission, which provides stability and increases confidence among investors.
Intercontinental Exchange, which owns the New York Stock Exchange, is also working on a trading platform for cryptocurrencies, representing a significant step forward for the industry.
Ultimately, Bitcoin’s value is a reflection of supply and demand. And when investors’ confidence in the currency goes up, that usually brings up demand too. If all of these trends continue, Bitcoin just return to its previous highs.
But Are Bitcoin Investments Safe?
Even though Bitcoin is recovering, that doesn’t take away any of the risks. Cryptocurrencies are still relatively new, and there’s a lot yet to be worked out. For example, further regulation changes could hurt the market.
Similarly, some other types of cryptocurrencies have turned out to be scams, and this hurts the overall perception of them, impacting demand for Bitcoin.
Additionally, it’s important to remember that Bitcoin and other cryptocurrencies still aren’t backed by a government or a physical commodity. Without that backing, if prices tumble and the cryptocurrency fails, you lose your money, and there’s no way to recover it.
In the end, Bitcoin is still a very high-risk investment.
So Is Now the Time to Invest in Bitcoin?
If you’re comfortable with the risk, then now may be a good time to invest in Bitcoin. However, it shouldn’t be the only thing you invest in.
Committing your entire retirement savings to cryptocurrencies would be incredibly dangerous. It wouldn’t be unlike taking all of that money and heading to a casino.
But, there is some potential. If you have a bit money to spare and aren’t afraid to lose it all, then you could have a lot to gain if Bitcoin keeps going up.
Just make sure to be smart about how much you invest, because it could all be gone in an instant.
Readers, have you been curious about investing in cryptocurrencies? Tell us about it in the comments section beneath this post.
Looking for more articles about Bitcoin? Give these a try:
- When Do You Pay Taxes on Bitcoin and Other Cryptocurrency?
- Bitcoin: Buy, Sell or Hold?
- Common Bitcoin Scams and How to Avoid Them
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