Bitcoin's surge that began in mid-January 2024 finally reached a peak in the last two days. On March 4th, the highest point was close to 68,000, and on March 5th, it went even higher, reaching 68,800, nearly breaking the historical peak of 69,000. However, just as many investors were anticipating Bitcoin to reach a historic peak, it took a turn. After reaching its peak, it did not continue to rise but began to decline.
Starting from noon on March 5th, Bitcoin began a cliff-like drop, falling by over 2,000 points within an hour. Afterwards, it started to slowly rebound, but the speed had already begun to slow down.
Compared to the bullish trend of the previous days, Bitcoin today showed a noticeable slowdown and fluctuation. This is largely because Bitcoin was nearing its historical peak. It skyrocketed from 43,500 USD at the beginning of February to nearly 69,000 USD now, a rise of over 55%. This trend directly boosted market confidence, attracting many investors unfamiliar with cryptocurrencies to try and join. However, it is important to beware that many of these investors are mainly speculative. Once the rising trend of Bitcoin stalls or even begins to decline, a rapid sell-off may quickly ensue.
Many institutions and experts have interpreted this surge in Bitcoin, and different interpretations have led to different conclusions. Overall, several viewpoints have been widely accepted:
1. Rumors of significant interest rate cuts by the Federal Reserve have been confirmed by multiple parties, including predictions from professional institutions such as Goldman Sachs, that the Federal Reserve will soon enter a new wave of rate cuts. This means a substantial amount of capital will enter the market, and Bitcoin is a main destination.
2. Bitcoin ETFs have been officially approved in the United States, with 11 ETFs starting to trade on January 11th. This means Bitcoin is gradually being recognized by the U.S., available for trading through official channels. Thinking broadly, this could be a milestone for cryptocurrencies entering the mainstream market, enticing previously hesitant investors to gradually enter the scene.
3. According to various analysts, Bitcoin will soon enter a new round of "halving," a periodic fluctuation in cryptocurrencies that happens roughly every four years. During this time, the rewards for mining Bitcoin will significantly decrease, as will the output. Currently, the demand for Bitcoin ETFs far exceeds the supply. The occurrence of "halving" will exacerbate this supply-demand conflict, thus currently fueling a frenzy.
Under the influence of several factors, Bitcoin experienced a sudden surge, attracting many investors unfamiliar with cryptocurrencies who are also unaware of the risks involved.
Recently, just like Bitcoin, gold has also started to rise, even reaching new historical highs in multiple countries and regions. However, its rise is much lower compared to Bitcoin, making investors more inclined to invest in Bitcoin. However, it's important to note that risk follows reward closely.
The surge in cryptocurrencies is indeed astonishing, and the huge profits are tempting, but the magnitude of declines is equally frightening. Under the peak of nearly 69,000 in late November 2021, was a terrifying drop to below 16,000 within just a year. Bitcoin can soar in the short term, but it can also plummet just as rapidly, bringing immense profits as well as significant risks and crises.
