Bitcoin surged past $100,000 within a year of its halving on April 19, 2024, but the significant price increase is largely attributed to Donald Trump’s election victory than the halving itself. The previous patterns indicate market factors at play, making Bitcoin’s future remain speculative. Caution is advised for investors amid economic uncertainties, as the cryptocurrency’s volatility raises risks, suggesting a preference for more stable growth stocks.
Bitcoin (BTC) reached an unprecedented value of over $100,000 last year. The question now is whether the last Bitcoin halving, which occurred on April 19, 2024, directly influenced this rise, or if it was other factors at play. The halving event, like the ones before it, reduced the mining rewards, affecting the rate at which new coins enter circulation. This inherently supports Bitcoin’s scarcity, which is a major selling point.
In the months following the halving, Bitcoin’s price exhibited fluctuations. On April 20, 2024, it was worth $64,994, but then saw a series of ups and downs. By May 20, 2024, it peaked at $71,448—a 10% increase since halving—only to dip back down to $59,013 by August 20. Ultimately, it surged to $97,756 by December 20, marking a significant 50% increase following those earlier drops. Notably, much of this upward momentum coincided with Donald Trump’s victory in the presidential election, promoting a more crypto-friendly environment.
Investors need to be wary of relying heavily on historical trends or patterns—past performance does not always predict future outcomes. Furthermore, the 2024 halving had been anticipated by the market, meaning its effects might have already been factored into Bitcoin’s valuation prior to the event. The real catalyst appeared to be the political shift, specifically the implications of President Trump’s new policies towards cryptocurrency, including potential tax breaks and the establishment of a Bitcoin reserve.
Despite Bitcoin reaching new highs, it’s essential to approach this asset with caution. While some investors may still refer to Bitcoin as “digital gold,” it hasn’t maintained that status effectively this year, facing severe volatility. As traditional safe-haven assets like gold experience price surges, Bitcoin’s performance has paralleled the fluctuations of the S&P 500, raising concerns about its stability.
For those without a high risk tolerance, investing in growth stocks may present a more secure path than venturing into Bitcoin or similar cryptocurrencies. The current market sentiment is shaky—speculative investments could easily face steep declines. Therefore, while Bitcoin might appear attractive during its upswings, investors should remain cautious given the unpredictable nature of its value and the ongoing economic uncertainties. Solid businesses with strong growth potential might be the safer route for those who prefer a less risky investment strategy.
