Bitcoin’s success has revolutionized the world of finance

Bitcoin's value continues to achieve record heights. Bitcoin is currently on track to have its best monthly performance since February.

Bitcoin’s value continues to rise, reaching new heights with the recent election of Trump. The cryptocurrency, which has been gaining increasing attention from investors, institutions, and even governments, is now on track for its best monthly performance since February.

Trump’s victory has added 45% to Bitcoin’s value, which now stands at around $75,000. This surge can be largely attributed to the placement of pro-crypto lawmakers in Congress, including Trump himself.

As a result, confidence in cryptocurrency markets is growing, with more support for crypto-friendly policies. This could ultimately accelerate the mainstream adoption of digital currencies, further boosting Bitcoin’s price and solidifying its position as a leading asset.

Bitcoin’s value has more than doubled since the beginning of this year, reaching record levels. The approval of U.S-listed bitcoin exchange-traded funds (ETFs) in January also played a significant role in boosting the market.

Bitcoin has risen by an impressive 130% this year. “The longer it survives it is taken more seriously, that’s just the reality of things,” said Shane Oliver, chief economist and head of investment strategy at AMP Sydney.

“As an economist and investor I find it very hard to value it…it’s anyone’s guess. But it does have a momentum aspect to it and at the moment the momentum is up.”

Bitcoin nearly hits $100,000

Bitcoin crossed the $75,000 mark with the election of Trump in early November. On the 21st, it came close to finally breaking the $100,000 ceiling.

Despite the growing success of the cryptocurrency, many people still remain skeptical of it. However, policy developments regarding Bitcoin, such as the January approval of U.S-listed bitcoin ETFs, may help to increase public trust.

“There have not been any ETFs like this before,” said Ric Edelman, founder of the Digital Assets Council of Financial Professionals.

“There are ETFs that invest in stocks of companies that do business in the crypto industry, such as exchanges and miners, and there are ETFs that trade futures in bitcoin, which is like buying equity options instead of stocks, but until now there have not been any ETFs that directly invest in and own bitcoin.”

Tempted to buy into Bitcoin? Here is what you need to know

If you are considering adding Bitcoin to your investment portfolio, there are several important factors to keep in mind.

Bitcoin and other cryptocurrencies are classified as speculative investments, meaning that people invest in them with the expectation that their value will rise quickly. These assets are highly volatile, and investors hope to profit from price fluctuations, although this also involves a high degree of risk.

“Normally, the way you think about a financial asset is you’re providing capital to the company,” said Michael Finke, a professor of wealth management at The American College of Financial Services.

“The company uses that capital to make something, and the people buy it. That creates profit. You can value the company based on the profitability you expect in the future. With bitcoin, it’s not producing anything, so the valuation is entirely speculative.”

While Bitcoin’s price has increased by over 600% in the last five years, it differs significantly from traditional investments like stocks. Unlike companies that manufacture products and pay dividends, Bitcoin’s value is largely speculative and has limited practical applications.

Moreover, the wealth generated by the stock market usually stems from reinvested dividends, which are compounded over time, leading to steady growth. In contrast, Bitcoin does not offer a similar opportunity for compounding or reinvestment.