Bitcoin just reached a new all time high of around US $108,000.

Why is Bitcoin going up and where is it headed?

Bitcoin's impressive year-to-date gain now stands at 200%, with the total cryptocurrency market value reaching US $4 trillion. Formerly skeptical, Trump has taken a pro-crypto position, highlighted by David Sacks' appointment as White House cryptocurrency advisor and Paul Atkins' nomination to lead the SEC, boosting investor confidence. Additionally, MicroStrategy, the largest corporate holder of bitcoin, joined the Nasdaq 100 index, and its shares have risen over 500% this year, showing increasing acceptance of digital assets among institutions.

BTC ETFs rose by US $2.1 billion last week. With Nasdaq at a record high, BTC's main moving averages indicate buying interest. Positive sentiment may persist following Abu Dhabi Finance Week and into the Christmas season. BTC could be a popular gift this year. Stablecoins are seeing net inflows and strong liquidity. Altcoins, which had notable price swings last week, are expected to rebound this week.

Stablecoins…are digital assets that are pegged to a reference asset, such as a fiat currency, commodity, or other cryptocurrency. The goal is to keep the value of the stablecoin the same as the reference asset. They are used to minimize the volatility of traditional digital assets. They are often used on DeFi platforms and to store money within the crypto ecosystem. Popular example…Tether (USDT).

Altcoins…are almost all cryptocurrencies other than Bitcoin and Ethereum (ETH) since most cryptocurrencies are forked from one of the two. Popular example…Solana (SOL).

Since the November election, cryptocurrency has risen over 50%, showing increased confidence in a better regulatory climate with the new US administration. Many potential bitcoin investors were waiting for the election results before investing. Bitcoin's market value has exceeded $2 trillion, and other cryptocurrencies are also growing. Ethereum (ETH), the second-largest token, approached the important US $4,000 mark.

Technical Analysis

The main point from the analysis is that the highs from December 5 now act as support for Bitcoin. This suggests that Bitcoin may keep rising, creating more technical support options. A fall below US $73,800 would change Bitcoin’s market trend. Until then, price drops could be good buying chances. Looking at Bitcoin's short history, it might rise from $100,000 to US $200,000 quickly, while Ethereum could exceed $6,000, and Solana might reach US $500. After this peak, Bitcoin might drop by 30%. More volatile altcoins could see larger declines of up to 60% as the crypto market cools next summer. If this happens, a recovery in the fall is expected, with many tokens possibly hitting previous highs by the end of next year.

How to invest in Bitcoin?

Cold Wallet…Storing bitcoin or any cryptocurrency in cold storage is the safest way to protect your assets from hackers and unreliable exchanges. However, there are physical risks. If you lose your cold wallet or it gets stolen, there is no way to recover your funds. It can also be lost in a fire, flood, or break down without any insurance. You have full control, but you are also fully responsible for your crypto. Something that didn’t work out great for James Howells, who has spent over a decade trying to find his hard drive in a landfill after it was accidentally thrown out by his ex-girlfriend. That hard drive contains 8,000 bitcoins, worth nearly US $1 billion now.

Exchanges…Buying crypto on exchanges like Kraken, Crypto.com, Bitget, Bitbuy, Coinbase, Shakepay and Wealthsimple has become easier in recent years. However, when you use these exchanges, you don’t truly own the crypto itself—only the rights to it as guaranteed by the exchange. Many exchanges lack proper regulations, and if one is hacked or uses questionable accounting practices, like FTX, you risk losing your assets.

ETF’s…Many would like to avoid the complex or time-intensive world of digital wallets and crypto exchanges. To fill this demand, fund managers offer cryptocurrency exchange-traded funds (ETFs), a more accessible way to invest in crypto's digital assets.

Crypto ETFs allow you to gain exposure to these currencies through your regular brokerage account, eliminating the need to directly purchase and store the tokens yourself. These funds typically track the performance of one or more cryptocurrencies, providing investors with a convenient way to diversify their portfolios and benefit from the potential growth of this market. The first crypto futures funds launched in 2021; spot bitcoin ETFs joined them in early 2024 and spot ether (ETH) ETFs were effectively approved in May this year.

Investing in crypto ETFs is not without risk. The market is volatile, with prices fluctuating significantly in short periods. In addition, the regulatory landscape for crypto is evolving, and changes in regulations will undoubtedly impact the performance and availability of these ETFs. The current lack of regulation and the fact that the underlying asset is not owned outright, are facts that need to be considered.

For those wanting long-term growth from their crypto, using a cold wallet is the safest option. Whoever is looking to generate income from crypto, ETFs or stocks from companies that leverage crypto, like Microstrategy, can be rewarding. I personally use a high-dividend ETF to earn monthly dividends, and sell covered call options between ex-dividend dates.

Getting involved in crypto in any way creates exposure to high volatility and it's important to assess the risks beforehand.

Disclaimer: The content of this blog post is intended for informational purposes only and under no circumstances can be relied on for decision making. I personally own some BTC, SOL, ETH, ADA, MSTR, MATA, MARA and BITO.