Bitcoin Keeps Soaring. Could It Hit $95,000 This Week?

11/13/2024 04:55
Bitcoin Keeps Soaring. Could It Hit $95,000 This Week?

Maybe the current crypto rally has enough juice to push the coin above that once-inconceivable level.

One of the hottest investments these days is a fifteen-year-old currency that doesn't exist in physical form.

That's right. Our mystery bachelor is Bitcoin (CRYPTO: BTC), which across that decade-and-a-half long stretch has been the most familiar and popular cryptocurrency. That's a fine position to be in these days since investors have eagerly been piling into all manner of digital coins and tokens since Election Day. As Bitcoin is the undisputed crypto leader it has rocketed to new heights. Might it even cross the $95,000 level by weekend's end?

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As we glide into the holiday season with the presidential poll freshly in the past, cryptocurrencies are benefiting from an unprecedented set of tailwinds.

There's the election, which is delivering to the White House not one but two men who've strongly indicated support for the crypto industry. Vice president-elect J.D. Vance, in fact, is a holder of Bitcoin as per recent election filings, so at the very least, he's likely to be displeased with any concentrated attempts to regulate it.

This blends well with the economy, which continues to thrive and seems to be exorcising that scary ghost of inflation. Everyone's least favorite economic development continues to weaken -- fingers crossed -- with the growth in the consumer price index (CPI) easing in the last few measurements.

That, in turn, has led to lower interest rates, to the tune of a cumulative 75 basis point reduction in the Federal Reserve's (Fed) key rate over the past two months. The regulator started hiking rates in the thick of the coronavirus pandemic in mid-2022. This was the start of a more than two-year series of raises aimed at getting the once-hibernating but suddenly resurgent inflation under some control.

All things being equal, lower interest rates are beneficial for assets on the more risky side of the investment spectrum, like cryptocurrencies. One major effect of lower rates is that they reduce the competitiveness of investments considered to be safe. At the same time, they enhance the attractiveness and potential returns of riskier assets.

This past weekend provided even more rocket fuel for Bitcoin and, as ever in the rallies it inspires, a wide range of altcoins such as Ethereum, Dogecoin, and many others.

One big advantage cryptos have over traditional investments like stocks is that, as decentralized assets, they're not beholden to the finance industry's long tradition of set trading hours. So this past Saturday and Sunday, investors with insufficient opportunity to trade during the work week piled in on the weekend. Rolling into Monday, Bitcoin had zoomed past the $80,000 price barrier and was teasing $90,000, setting new all-time highs on the way.

Looking at the market right now, it's entirely plausible that Bitcoin will hit that $95,000 level this week. No rally lasts forever, and given the recent leaps that make this one feel like a bubble, I feel some degree of correction will occur before long. Yet the bulls are still running rampant, and while investors should be careful in such a frothy environment, I feel Bitcoin will notch a few more record highs before the market settles down.

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Eric Volkman has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.

Bitcoin Keeps Soaring. Could It Hit $95,000 This Week? was originally published by The Motley Fool

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