Bitcoin (CRYPTO: BTC) is back in the zeitgeist. For better or worse, the leading cryptocurrency is gaining popularity once again after seeing a massive worth boost in 2024. After rising around 140% year to date (YTD), the worth of bitcoin has now broken through $100,000. Companies like MicroStrategy are buying up bitcoin for their settlement sheets, while the incoming Trump Presidential administration is talking about building a bitcoin strategic safety net.

The narrative around bitcoin is extremely bullish at the instant. intelligent investors comprehend that this has happened before. In 2013, 2017, and 2021, investors got increasingly optimistic about bitcoin correct before a worth crash. Is the cryptocurrency setting up for another crash in 2025? Let’s receive a closer look at bitcoin as we sit here in December 2024, and whether the cryptocurrency belongs in your financing collection today.

Bitcoin’s dazzling rise in 2024

The skyrocketing rise of bitcoin in 2024 can be boiled down to two influences. First, we have the approval of bitcoin and cryptocurrency trade-traded funds (ETFs) in January. Bitcoin ETFs have purchased tens of billions of dollars’ worth of bitcoin for clients this year, showing the demand for these products in the monetary globe. If you include MicroStrategy and its bitcoin buying spree, there have been close to 700,000 bitcoins purchased by institutions so far in 2024. That is 3.3% of the 21 million bitcoins that will ever exist.

Ripple result:Is the cryptocurrency XRP a millionaire maker?

After the approval of bitcoin ETFs, the worth of the coin shot up to over $60,000. It then hovered around this level until the United States presidential election around a month ago. With Donald Trump’s win, investors became even more bullish about the worth of bitcoin. The incoming administration has discussed building a Bitcoin Strategic safety net, meaning that the United States government would buy and hold a significant amount of bitcoin. While I can’t declare I approve of my levy dollars getting used in this manner, this safety net should have a positive result on the worth of bitcoin. Since the election, the worth of bitcoin has soared close to 50% and sits at around $106,000 as of this writing.

view, bitcoin is not an property that has underlying returns power. With a fixed supply of digital tokens, bitcoin only goes up if more and more people are convinced they should own it. With institutional funds and political promises pouring fuel on the fire, it’s no shock that bitcoin’s worth has exploded through $100,000 in late 2024.

Bitcoin worth predictions and gold comparisons

Bitcoin worth predictions vary greatly. Some investors ponder that it is headed to $1 million a coin, or even $13 million. Others declare it is worth zero. What is constant among these worth predictions is the path lining up with what would make the predictor wealthier. MicroStrategy CEO Michael Saylor is the one with a $13 million worth target.

Some investors look at bitcoin as digital gold, believing it will eventually supplant that historical store of worth in trade worth. Today, gold has an estimated trade cap of around $18 trillion (it is not obvious how many ounces are actually owned, so this is an approximate). Using the 21 million bitcoin count, an $18 trillion trade cap for bitcoin equates to a bitcoin worth of $857,000, or around 8x the current worth. This may keep investors bullish on the cryptocurrency.

Uncertainty is the only certainty

Discussions around bitcoin are endless. I discover them tiresome and circular. The frank truth is that nobody knows whether bitcoin will crash, flatline, or soar in 2025. If someone claims to be sure about bitcoin’s worth movements, they are not being truthful, even if they complete up looking correct. Anyone can forecast things with confidence. I can inform you a dice is “guaranteed” to land on six before you roll it, with a one in six chance of looking correct. That doesn’t warrant my confidence about the odds of the dice roll.

You should look at bitcoin in the same way. Feel free to own it if you depend in the long-term thesis around digital gold, funds adoption, or anything else. But don’t trade the cryptocurrency in the mistaken certainty that bitcoin’s worth certainly will soar or crash in 2025. The only factual certainty is uncertainty when it comes to cryptocurrency and bitcoin.

(This narrative was updated to add a photo and video.)

Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends bitcoin. The Motley Fool has a disclosure policy.

The Motley Fool is a USA TODAY content associate offering monetary information, analysis and commentary designed to assist people receive control of their monetary lives. Its content is produced independently of USA TODAY.

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