Bitcoin (BTC) has surged over 140% this year, surpassing other investment options such as stocks and gold, with considerable optimism for continued gains in its value. Does Bitcoin’s resurgence to the $40,000 level indicate the preparedness of the industry and the initiation of another bullish trend, or is there a possibility of the coin facing setbacks again?
After a cryptocurrency market crash last year, Sam Bankman-Fried, the founder of FTX, is currently in jail for fraud. Simultaneously, Binance, a prominent exchange, and its founder Changpeng Zhao have admitted guilt to U.S. anti-money laundering and sanctions violations, leading to fines of $4.3 billion and $50 million, respectively.
Despite this, Bitcoin has recently surpassed a $41,000 threshold, a level not seen since April 2022, driven by factors such as anticipation of a Federal Reserve interest rate reduction and optimistic prospects for increased demand from exchange-traded funds (ETF).
FUD and FOMO driving Bitcoin price. Source: Santiment
Experts split on BTC
Another stark supporter of BTC and optimist is Mike Novogratz, CEO of Galaxy Digital Holdings, who foresees Bitcoin reaching its previous peak within the next year, fueled by growing expectations for the approval of the first U.S. ETF, as per a report by Bloomberg on November 29.
With BTC’s recent resurgence, some financial experts and legends still haven’t forgotten the events plaguing this cryptocurrency.
Charlie Munger, the late vice chairman of Berkshire Hathaway Inc., denounced Bitcoin as “gambling contracts with a nearly 100% edge for the house, entered into in a country where gambling contracts are traditionally regulated only by states that compete in laxity,” further emphasizing the need for a federal law, in his opinion piece for Wall Street Journal on February 1.
Warren Buffett shared the same opinion when it comes to Bitcoin, calling it “ rat poison squared, “probably rat poison squared, and saying that he wouldn’t buy Bitcoin even if it dropped to $25.”
Meanwhile, the market capitalization of Bitcoin just surpassed that of his company, Berkshire Hathaway.
Warren Buffett has called #Bitcoin "rat poison squared" and stated that "it is an asset that creates nothing".Today, the market capitalization of $BTC surpassed that of his company, Berkshire Hathaway. pic.twitter.com/I0EtC4aRZ3
— Mark Harvey (@thepowerfulHRV) December 3, 2023Whether Munger and Buffet were right or will Bitcoin return to its previous highs, or even surpass them, remains to be seen; in the meantime, investors should carefully consider all the options and analyze the potential risks when dedicating their money to a particular investment.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
