2 Major Risks Investors Should Know Before Buying Bitcoin in 2024
It’s hard not to be bullish on Bitcoin (CRYPTO: BTC) in 2024. Last year, Bitcoin was up more than 150% and soundly outperformed every major market benchmark. At a recent price of $45,000, Bitcoin was trading at its highest level since April 2022. On top of all that, anticipation is growing over the upcoming Bitcoin halving event and what that might mean for the future price of Bitcoin.
The Spot Bitcoin ETF
The first risk involves the imminent launch of the first spot Bitcoin ETF for the U.S. market. Over the final months of 2023, this looked like a slam-dunk certainty, with many expecting the SEC to approve the first spot Bitcoin ETF in early January. After all, more than a dozen Wall Street firms have submitted ETF applications, and they have been carefully updating and amending these applications as needed. But the latest word in the crypto markets is that the SEC might delay any approval for a spot Bitcoin ETF until there is a more comprehensive regulatory framework in place for crypto within the United States. Obviously, this would be devastating news for Bitcoin investors, given that much of the recent run-up in price has been driven by anticipation around approval of the spot Bitcoin ETF. Moreover, even if the SEC approves a spot Bitcoin ETF, there’s still the matter of what will happen to the price of Bitcoin. According to Cathie Wood of Ark Invest, the price of Bitcoin might actually decline in the short term due to a market phenomenon called „buy the rumor, sell the news“.
The Arrival of Institutional Investors
The other risk involves the sudden influx of many new institutional investors into crypto at one time. Right now, everyone is focused on the potential tsunami of new money flooding into Bitcoin, which is almost certain to prop up the price of Bitcoin. But what’s actually going to happen to Bitcoin over the long haul? Crypto executive Arthur Hayes, for example, thinks that the entry of large institutional investors into crypto will „completely destroy Bitcoin“. As Wall Street goes into asset accumulation mode, it could transform Bitcoin from a dynamic, thriving blockchain with multiple use cases into a lifeless blockchain where nothing interesting ever happens.
To make sense of all this, it’s up to you as an investor to decide if Bitcoin is right for you and what the best way to invest in it will be going forward. Heading into 2024, the primary choice is shaping up to be one between spot Bitcoin and a spot Bitcoin ETF.
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Im Anschluss noch häufig gestellte Fragen hinzufügen:
– Was sind die Risiken beim Kauf von Bitcoin im Jahr 2024?
– Welche Auswirkungen hat das potenzielle Eintreten großer institutioneller Investoren auf Bitcoin?
– Was ist der Unterschied zwischen einem Spot Bitcoin ETF und Bitcoin, das auf Kryptowährungsbörsen gekauft wird?