A possible explanation is that people want to hedge against inflation and more general, systemic risks (e.g. wars all around) but they don’t want to buy gold. No matter the causes, it’s indisputable: investors keep trusting cryptocurrencies for their portfolios.
Last week (mid-October 2023), Bitcoin has experienced a resurgence, reaching nearly $35,000, its highest value in almost 18 months and more than double its price at the start of 2023. After surging from just over $5,000 at the onset of the pandemic to nearly $68,000 in November 2021, Bitcoin faced a decline due to Federal Reserve rate hikes and the collapse of a major crypto company, FTX. At the beginning of 2023, the cryptocurrency’s value had plummeted to under $17,000, losing over 75% of its worth. However, investors began returning as inflation cooled, and the collapse of tech-focused banks prompted more individuals to explore crypto investments.
Bitcoin is receiving a boost due to prospects for a broader investor base. Advocates in the industry suggest that a new method of investing in Bitcoin at spot prices, rather than through futures, could make it more accessible to a wider audience and potentially reduce some of the known risks associated with cryptocurrency investments such as very high price volatility.
