Mark Tencaten | Bitcoin Regains Its $30,000 Level. Should You Invest

For the first time since June of last year, Bitcoin (BTC) has been above $30,000, reaching a high of roughly $31,400 this morning. According to Mark Tencaten, the price of Bitcoin has increased by almost 80% from the year's beginning. It still has plenty of time to go before it reaches its 2021 high of roughly $69,000, which is astounding. Mark Tencaten explains the reasons behind its current price movement and the implications for investors.

What is driving Bitcoin's surge?

A number of factors have fueled the current increase in Bitcoin. The most prominent of them is the notion that the Federal Reserve may decide to cease raising interest rates. In an aggressive effort to rein in inflation, the Fed has been driving interest rates upward. This significantly influenced cryptocurrency values since it meant that investors withdrew from riskier investments like Bitcoin. If the Fed relieves its stricter policies, it is believed that investors may turn back to cryptocurrencies.

According to several analysts, concerns about traditional banking are a factor in price hikes. Another reason why people are drawn to cryptocurrencies, in Mark Tencaten's opinion, is that they are "an investment that lies beyond traditional banking and finance."

The price of Bitcoin is significantly influenced by sentiment. This market has a significant amount of speculative price movement. Investors frequently purchase when things appear to be going well, partly because of a fear of losing out, which drives prices even higher. Therefore, it is not unexpected that the Cryptocurrency Fear and Greed Index has reached dangerously high levels of greed. Since November 2021, the index, which considers several variables, including movement, volatility, and social media monitoring, has yet to see such high levels of greed.

Can it go up any higher?

Many cryptocurrency investors are curious if this may finally signal the final days of the cryptocurrency winter. It makes sense, given that many investors' portfolios have suffered huge losses. Unfortunately, no one possesses a crystal ball; therefore, predicting if and how long the present rise will last is difficult.

What we are aware of is that Bitcoin and other cryptocurrencies face significant short- and long-term obstacles. The whole sector has been the target of regulatory pressure. According to the SEC, many cryptocurrencies are unregistered investments and should fall under its purview. If it is able to win this lawsuit, it would significantly alter how we acquire and trade cryptocurrencies.

Additionally, there are rising worries that a recession is on the horizon. Consumers tend to become more risk-averse during recessions, which might be another factor weighing down Bitcoin's price. More broadly, the failure of multiple cryptocurrency sites has damaged people's faith in the whole sector. This is especially true when we discover more about FTX's inner workings and the extent of the company's financial mismanagement.

Should you invest?

If you're thinking about investing in Bitcoin, be aware that it is still a very volatile asset. Consider how it could perform over time, and ensure you know the hazards. Additionally, there are no certainties that rates will ever return to their peak levels because we no longer live in the stimulus-aided environment that sparked the crypto craze of 2020 and 2021.

It's also crucial to feel at ease with the effects of the industry's comparatively lax regulation. First, if your cryptocurrency platform collapses, there isn't much in the way of investor protection. Second, prices will probably decrease in the near future if and when regulators impose additional regulations. For instance, we will learn about other crypto players' reserves once there is greater openness. Stricter regulation could additionally reveal the accuracy of claims of dishonest actions, such as wash trading.

However, crypto evangelist Mark Tencaten contends that the dominant cryptocurrency may become the future of digital money and might revolutionize how we use money. If you agree with his reasoning and decide to invest in cryptocurrency, it's crucial to control the amount of risk that you take on and make sure it makes up a modest fraction of your entire portfolio. Abide by the fundamentals of cryptocurrency investing: Use a cryptocurrency exchange you trust and only invest money you can afford to lose.