Another day, another milestone for Bitcoin.
The alternative currency asset rose more than 3% yesterday to $34,500.
It is up 29% in the past month, up 104% since January, and some analysts even go as far as suggesting it could soon shoot past the $64,400 peak it hit in November 2021.
I wouldn’t bet my kids’ college tuition on that overly optimistic forecast, but if you want to understand what’s happening and get positioned for a potential windfall…
Here are some points to work with:
The positive sentiment is attributed to the anticipation of a Bitcoin exchange-traded fund (ETF) and a flight to safety, which led to a spike in short liquidations. For context, Investors who bet against Bitcoin (short positions) had to cover their positions as the price rose, resulting in short liquidations totaling $375.89 million in less than 48 hours.
Another reason for the bullish sentiment is Grayscale’s court victory over the SEC.
If you’re unfamiliar with the case, the U.S. Court of Appeals for the D.C. Circuit issued a mandate compelling the Securities and Exchange Commission (SEC) to revisit Grayscale Investments’ application for a spot Bitcoin ETF (a vehicle for safer Bitcoin investing).
If you remember, the cryptocurrency market has been buzzing since industry titan BlackRock applied for its Bitcoin exchange-traded fund (ETF) in June. The conventional wisdom was that Bitcoin could surge past $30,000 as more financial institutions announced plans to launch their spot Bitcoin ETFs. This is precisely what happened.
But it could get better.
According to The Motley Fool, if large institutions like Blackrock allocated 1% of their wealth to Bitcoin ETFs, it could boost crypto’s market cap by up to $1 trillion.
This isn’t far-fetched because, for one, Blackrock alone manages around $10 trillion in assets. And for two, a Bitcoin ETF allows its conservative clients to benefit from Bitcoin’s price movements without direct exposure to cryptocurrency volatility.
Now, it’s likely that new institutional money from Blackrock and others will push crypto assets higher, but I refuse to touch this asset class because it’s just too volatile for me.
However, if you want to speculate (and potentially pocket significant profits when the SEC approves Blackrock’s application for a Spot Bitcoin ETF anytime soon)…
I won’t discourage you from allocating a small portion of your portfolio to cryptos.
At the end of the day, it doesn’t matter if you trade Bitcoin, ETH, or the Nasdaq…
What counts is having a reliable strategy that puts money in your pocket regardless of market conditions. And if you don’t have that yet, you may never see the above-average, market-beating returns you need to reach your desired level of personal wealth.
If you need help, see one of my strategies for consistent cash flow in this market.