The price of Bitcoin (BTC) surged past $42,000 on January 4 as investors rushed to buy the asset amid increasing optimism surrounding the market. The surge in the price of the cryptocurrency was triggered by a dovish signal from the US Federal Reserve, which announced a shift in its monetary policy framework. While the Fed’s announcement is still being digested by the markets, investors and analysts are now turning their attention to what this could mean for the future price of Bitcoin.
At the time of writing, Bitcoin is trading around the $44,000 level and many of the analysts are predicting that the cryptocurrency could go much higher. The bullish sentiment surrounding the market, is mostly based on the idea that the influx of institutional investors, wagered on the back of the recent Bitcoin halving and the Fed’s dovish statement, could trigger a new bull run.
However, as with most asset classes, there is no certainty as to where the market will head. While it may be tempting to invest in Bitcoin following a great run of positive news, it is important to remember that volatile conditions can give way to extreme market swings, both on the upside and downside. Therefore, it’s important to manage risk first and foremost and only invest what you can afford to lose.
That being said, there is plenty of room for optimism surrounding Bitcoin and it is likely that the cryptocurrency will continue to move higher in the near-term. However, whether the recent surge in the price signals the return of the 2017-like bull run remains to be seen.
