Bitcoin breaks historical records again and again. Is it worth relying on the currency?

$20,000 growth in a week

Almost a week ago, on 6 November, after some stagnation, the cost of Bitcoin updated its record high, exceeding $75,000 against the backdrop of the presidential elections in the United States. On this day, the cryptocurrency broke records twice — on the night of 6 November, the day of the US presidential election, the Bitcoin rate began to grow from about $68,000 and for the first time reached exactly $75,000 on the largest crypto exchange, after which it rolled back slightly.

Later, amid reports of Donald Trump's victory, the rate again updated the record on Binance, reaching $75,407. Then the price of the cryptocurrency adjusted again.

Then Bitcoin updated its historical maximums daily, reaching $89,000 today. At the time of publication of the article, the cryptocurrency was trading at $86,000.

Since the beginning of 2024, the first cryptocurrency has doubled in price. Its value has increased by 30% in the last week alone.

“It's a popularity game”

“Last week, elections were held in the United States, Donald Trump won. Elon Musk may play one of the key roles in his administration. At one time, he invested quite a lot of money in Bitcoin when he was promoting the Tesla brand. Accordingly, many predicted that the presence of such a prominent figure in the Trump administration suggests the promotion of the use of cryptocurrencies in economic calculations. There is an assumption that Bitcoin's capabilities will only expand and its popularity will increase,” private investment consultant Andrey Kochetkov outlined the reason for the events of the last week.

The speaker does not see any other reasons for the growth of the Bitcoin value. In general, the cryptocurrency does not depend on any economic events — it is influenced by politics and any bright statements about the coin.

Against the background of such a sharp growth, many Bitcoin owners may begin to sell the currency in order to lock in profits, the expert believes:

“Bitcoin has skyrocketed in price over the past week, and after such sharp movements on the market, as a rule, there is a rollback. There are no real actions to expand the capabilities of Bitcoin yet, and the significant increase that has taken place may force some Bitcoin owners to sell the currency and lock in profits in order to enter at lower levels. Even Donald Trump's administration will only take effect in January after the inauguration. A lot can happen before that time. And frankly, many don't see the point in taking further risks now.”

Kochetkov is sure that the bitcoin market is overheated. At the moment, it is better to “stay on the sidelines” or open short positions on the cryptocurrency. However, serious consequences for the global and American economies should not be expected.

Many attach great importance to bitcoin, although in essence it is an electronic popularity game. It is not yet perceived by central banks as a means of payment. Many companies that accept bitcoin take a conscious risk, simply expanding opportunities for customers. But this currency is very volatile. By and large, it does not depend on economic events and decisions. The growth now took place on the so-called wave of hype, many are entering this market. There is also a possibility that those who bought Bitcoin earlier will lock in profits at the expense of those who came on the wave of popularity, he believes.

“Fraudulent schemes will develop”

In general, any cryptocurrency is a very risky investment tool, warned the founder of the Cryptopoligon project, Yakov Tenilin:

“Due to the low amount of money in cryptocurrency compared to classic shares, it reacts very quickly to any changes. Therefore, any statements and any political event affect cryptocurrencies — both negatively and positively. As an investment, the tool is quite risky. What to do, sell or buy, everyone decides for themselves.”

As for more obvious consequences, in the near future we can expect an increase in the number of fraudulent schemes. Attackers will take advantage of the growing interest for their own gain.

“At the moment, the cryptocurrency greed index is almost record high. This means that people are buying up everything that is available. Because of this, fraudulent schemes will develop very actively,” Tenilin explained.

A sharp drop in value after the same dynamic growth is not new for cryptocurrency. Such jumps can only be withstood by reliable market participants who have long been established in the industry and do not expect quick earnings, the speaker believes. Newcomers will “repeat the circle of past newcomers” and either win or lose:

“A sharp rollback in the value of bitcoin is also possible, as is further growth. No one can answer here. Forecasts are never made for cryptocurrency in general. Anyone who does this is a fraudster.”