Bitcoin’s Astonishing Price Hike – Is it for Real?
Bitcoin, the most speculative digital asset, has now been continually targeted by investors. They speculate whether investing in Bitcoins would be an ideal option in the current scenario or not when the digital asset appears to be overhyped. The hype began after the Tesla king invested around $1.5 billion into the cryptocurrency, thereby skyrocketing its price to an all-time high.
Bitcoin breached $56k – Should you invest in it?
The tremendous demand from Bitcoin buyers looking to hedge the speculative digital asset against inflation contributes to the astonishing rise in its price. Bitcoin briefly broke the key resistance level at 56K, thus taking its weekly gain to approximately 18%, followed by Ether, which rose by 12%.
Bitcoin’s gain has been fueled by its mainstream adoption by leading investors like Tesla, BNY Mellon, Mastercard Inc, to name a few. In such a demanding scenario, investing in Bitcoin despite knowing its volatility would not be that bad.
Current market sentiment for Bitcoin & the investment
Regarding the current market condition, John Willock, the Chief Executive at Blocktane exchange, said, “Through the insatiable buy-side pressure from exchange-traded fund (ETF) issuers, closed-end funds and large public corporations adding Bitcoin to their positions, demand is massively outstripping supply.” He also assured that this time Bitcoin has emerged stronger, and it will not be like what happened after the market crash in 2017.
Is investment in Bitcoin safe, or should we invest in BTC mining stocks?
According to Bitcoin Prediction, Investing in Bitcoin is way much safer than investing in stocks of the Bitcoin-related companies, including the miner companies – the computers that solve complex algorithms to survive in the cryptocurrency industry. It is a myth that if you invest in a Bitcoin miner, you can get Bitcoin as a reward as and when you carry out a Bitcoin mining operation, and every time the price of Bitcoins rises, your prize value always rises. In reality, it is not always so.
Take the example of Canaan Inc., the largest member of the Elwood Blockchain Global Equity Index that produces chips and other mining equipment. Despite the rise in Bitcoin prices, the investment put in mining turned out to be devastating. Canaan’s sales dropped for 4 quarters in June and September, and there was even no sell-side data left to guess its revenue or share price target.
Now that cryptocurrencies are in the spotlight of investors, the market has become more receptive to even the slightest change taking place in the cryptocurrency industry. Bitcoin is the most widely popular cryptocurrency, thus investing in Bitcoin and reaping the rewards from it hugely impacts the market.