Bitcoin’s exciting journey to record highs

The bitcoin, the first and most popular cryptocurrency, has experienced a significant recovery over the last year. After reaching a low of $16.227 in December 2022 (just one year ago), the price of the digital currency has soared to over €40,000 again in this new boom period of the most important digital asset.

Why this upward turn after years?

Bitcoin’s return to the upside is attributed to a number of key factors that have driven its growth in recent times. This cryptocurrency has experienced a significant increase in value due to the growing expectation of new demand for exchange-traded funds. In addition, it is anticipated that the possible approval, in the coming weeks, of the first cash Bitcoin ETF in the US will further fuel the speculative fervor for this cryptocurrency.

The cryptocurrency has extended a bullish streak, reaching the highest price since April 2022.

All-time High

Bitcoin has experienced a significant increase in value in recent years, reaching its first peak value in 2017. Since then the Bitcoin price maintained some regularity, but inevitably with the arrival of the pandemic, its strength was weakened; weakness that served as a litmus test before an exponential post-pandemic growth, leading it to today’s price, previously passing through its all-time high in 2021.

Its highest value was reached in November 2021, when the price of just one Bitcoin was $66,000.

What is the reason for this recovery?

We will analyze the main factors that are driving bitcoin’s rise:

1. Reduction of inflation

Inflation is one of the main factors driving bitcoin’s rise. Inflation in the U.S. peaked at 9.1% in June 2023, which has led investors to seek assets that can protect their value against the loss of purchasing power.

Bitcoin is considered a safe haven investment, as its supply is limited and it is not subject to manipulation by governments or central banks. This makes it an attractive option for investors seeking to protect their wealth from inflation.

2. Increase in interest rates

The U.S. Federal Reserve has raised interest rates by 75 basis points at its last two meetings. This move is designed to curb inflation, but could also lead to an economic recession.

In a recessionary environment, investors often look for safe assets that can hold their value. Bitcoin is considered an attractive option for investors looking to protect their wealth from the recession.

3. Increased acceptance by institutions

More and more financial institutions are embracing bitcoin. Companies such as MicroStrategy, Tesla and Square have purchased large amounts of bitcoin, which has contributed to increased demand for the digital currency.

Increased adoption by institutions could lead to greater bitcoin price stability. This could attract more institutional and retail investors, which could further boost the price of the digital currency.

4. Favorable regulation

Regulation of the cryptocurrency market is evolving in favor of bitcoin. In the United States, the Securities and Exchange Commission (SEC) has approved the first exchange-traded fund (ETF) investing in bitcoin.

Favorable regulation could help reduce bitcoin price volatility and attract new investors.

It is likely that bitcoin will continue to rise in the coming months as these factors remain favorable for the digital currency.

Expert perspectives and predictions

Opinions of analysts and financial experts

Numerous investment experts and cryptocurrency market analysts suggest that Bitcoin has the potential to continue to increase in value in the coming months. They base this on several fundamental factors, including increasing institutional adoption, growing public awareness and a shift towards digital assets as a store of value.

Possibility of surpassing the historical maximum

Predictions on whether bitcoin will reach or surpass its all-time high of $66,000, reached in November 2021, vary considerably. Some optimistic analysts argue that the current uptrend could lead the cryptocurrency to touch that historic mark again and possibly surpass it. They base their outlook on increased adoption, continued institutional interest, and the search for refuge from inflation and volatility in traditional markets.

Factors to be considered

However, it is essential to keep in mind the inherent volatility of Bitcoin. Despite bullish predictions, the cryptocurrency market is highly unpredictable and can change rapidly. The likelihood of Bitcoin reaching new all-time highs is subject to a number of external factors, including regulatory changes, unexpected global market events and investor response to changing economic conditions.