Bitcoin surges to new all-time high as US lawmakers prepare key crypto legislation

Simon Peters, crypto analyst at eToro, says: “Bitcoin set a new all-time high yesterday. Price is again knocking on the door of the $112,000 resistance level today, indicating that a major breakout could be due. To what price though we’ll have to wait and see

“Ultimately though, the price should go higher in the long term. Bitcoin is behaving according to the community narrative – as a hedge against monetary debasement – as central banks continue to run expansive monetary policy, governments keep borrowing and the money supply keeps rising.

“At the same time demand for the crypto asset, particularly from institutions, is growing. Public and private companies, funds and ETFs now command roughly 3.5 million bitcoin or about 17% of the fixed 21 million supply, up from 2.6 million bitcoin just a year ago. This increase in demand is putting further upwards pressure on the price.

“Finally crypto assets are gaining more regulatory and political support. The US is heading into ‘Crypto Week’ where the House of Representatives will be considering three landmark pieces of legislation which if passed will provide a massive boost to and further legitimise the sector.

“It’s hard not to be optimistic about bitcoin at this moment in time, but the risk of a fall in price or short-term pullback still exists. Before investing in bitcoin, potential investors should evaluate their time horizon and how long they are prepared to be invested for. Only invest with money that you can afford to lose and rather than deploying all of your capital at one time maybe consider dollar-cost-averaging (i.e. investing a fixed amount of money at regular intervals) as this could reduce the risk of investing right before a downturn in the price and also lower your average cost basis, giving you a greater return in the long run.”