Bitcoin is on a tear. Soaring past $70,000, the cryptocurrency is reaching record highs in 2024. This rally is fueled by a perfect storm: the approval of exchange-traded funds (ETFs) that track Bitcoin’s price, and the impending “halving” event, which will significantly reduce the number of new Bitcoins being created.
Bullish analysts are predicting the price could reach a staggering $200,000 by 2025. However, not everyone is puffing on this digital cigar.
Is Bitcoin The New Cigarette? A Financial Advisor’s Skepticism
Jamie Dimon, the CEO of banking giant JPMorgan Chase, remains a staunch critic of Bitcoin. He compares Bitcoin to cigarettes, acknowledging people’s right to invest in them but highlighting the inherent risks.
JPMorgan Compares Bitcoin to Smoking Cigarettes https://t.co/UZOHocK7FA
— 🏄♂️SurfingTheMarkets™ (@SurfingTheMrkts) March 12, 2024
Dimon worries that Bitcoin facilitates illegal activities and poses a threat to investors. He has even gone as far as suggesting governments clamp down on Bitcoin altogether. This isn’t the first time Dimon has lit a metaphorical fire under Bitcoin. In December, he called Bitcoin a “pet rock” with no intrinsic value.
Dimon’s concerns echo a broader skepticism surrounding Bitcoin. While some see it as a revolutionary financial tool, others view it as a speculative bubble waiting to burst. Regulation remains a thorny issue, with governments grappling with how to oversee this decentralized digital asset. The potential for money laundering and other illegal activities adds fuel to the regulatory fire.
Bitcoin is now trading at $72.441. Chart: TradingView
Will Bitcoin Become A Mainstream Investment Or Remain A Fringe Phenomenon?
Despite Dimon’s disapproval, Bitcoin is gaining mainstream acceptance. The launch of Bitcoin ETFs allows traditional investors to easily expose themselves to the cryptocurrency without the complexities of directly buying and storing it. This institutional interest is a significant development, signaling a growing belief in Bitcoin’s long-term viability.
However, Bitcoin’s wild price swings raise concerns about its suitability for risk-averse investors. Unlike cigarettes, which offer a (questionable) physical product, Bitcoin is purely digital and relies solely on market confidence. A sudden shift in sentiment could trigger a dramatic price drop, leaving investors holding the bag.
Bitcoin On A Rampage
Meanwhile, Bitcoin has surged to a new all-time high this year, defying the doubters and rising by more than 70% since January. Leading tailwinds include anticipation for the next halving cycle and the approval of spot bitcoin ETFs.
According to a recent article by Ruchir Sharma of Rockefeller International, this most recent surge may show that the asset has longevity and is more than just a passing trend.
However, the introduction of around a dozen exchange-traded funds (ETFs) by Wall Street indicates that large organizations are beginning to take cryptocurrency more seriously.
Featured image from Pexels, chart from TradingView