Bitcoin: with an increase of 150% in the year, cryptocurrency exceeds US$ 40 thousand for the first time in a year and a half

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The rise was driven by greater prospects for a cut in US interest rates. Cryptocurrencies / Bitcoin / Ethereum Reuters Bitcoin, the most important cryptocurrency model in the world, surpassed US$40,000 and reached its highest value since April 2022. During the year, the increase has already reached around 150%. The asset rides a wave of momentum as hopes grow of a possible cut in US interest rates, which favors risk assets, and as traders bet on the imminent approval of bitcoin funds traded on the US stock market . This Monday morning (4), bitcoin reached US$42,100, eliminating the fear that settled in the crypto markets after the collapse of FTX and other crypto business failures last year. “Its 50% recovery since mid-October appears to mark a decisive shift from the lows of 2022 and early 2023,” Justin d’Anethan, head of business development for Asia-Pacific at Keyrock, told Reuters. D’Anethen said evidence of institutional buying through November showed a new round of interest and that while future reversals were not inconceivable, the lows reached around $16,000 a year ago “probably marked the bottom.” . Bitcoin: Find out what the most popular cryptocurrency is and how it works What is bitcoin? Cryptocurrencies are assets such as the real, dollar and euro, but which only circulate in a digital environment. Bitcoin is the most important model, but there are many others, such as Ethereum, Litecoin and Ripple. To buy them, you need to open an account with specialized brokers. Why does the price vary so much? What makes bitcoin so volatile is the search for its fair value in the market, as there is no backing or regulation by central banks. Operations are recorded using blockchain technology, which records all amounts transferred, who transferred it to whom and what the value was. If, on the one hand, there is no authority that dictates rules to the market or another currency that references its price, there is also no protection for assets. Security is based on technology and market acceptance. It therefore falls into the high-risk investment category. What are the risks? The numbers are eye-catching and excite any investor looking to increase their income. Like any variable income investment, however, bitcoin has clear risks of loss of invested assets. The first risk is technological, in a scenario that creates some embarrassment to the security frameworks of cryptocurrencies. Analysts are confident that blockchain does not suffer this risk in a predictable scenario. Second, large fluctuations require investors to think of bitcoin as a long-term store of value. The need to withdraw at a bad time can result in the loss of a large part of what was invested. Therefore, the basic rules of setting up an emergency reserve in fixed income assets with daily liquidity for unforeseen events, in addition to the aftermath in other riskier assets, are valid. For those who have their reserves ready and want to move into cryptoactives, the experts’ recommendation is to reach around 5% of the investment share in something of such risk, if the investor’s profile is more aggressive. No less important, it is necessary to understand the dynamics of how digital currency works and the future scenario.

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