Bitcoin crossing $100,000 fuels excitement, but it’s driven by speculation, lacking guaranteed returns. Approach with caution. Coinbase loans add extra complexities.

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Bitcoin has recently crossed the $100,000 mark, sparking a wave of excitement and speculation among investors. However, it’s crucial to approach this milestone with caution. Buying Bitcoin at such a high price is likely not a good investment. This is a non-productive asset, and you’re essentially betting that someone will pay more for it later. There’s no guarantee of that happening.

Coinbase is re-starting “Bitcoin loans,” but read the fine print. Essentially, Coinbase acts as the middleman in this process. They take your Bitcoin, wrap it into cbBTC, and then deploy it into an Ethereum-based DeFi lending protocol called Morpho. This means your Bitcoin isn’t just sitting in a wallet—it’s actively being used in a decentralized finance ecosystem, which brings its own set of risks and complexities. Given these factors, I would not touch this product with a 10 ft pole.

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The recent surge in Bitcoin’s price can be attributed to several factors, including institutional investments and market speculation. For instance, BlackRock’s iShares Bitcoin Trust (IBIT) recently acquired 5,250 Bitcoin in a single day, valued at approximately $528 million. This massive purchase highlights the growing institutional appetite for Bitcoin, but it also raises questions about the sustainability of such high prices.

Despite the bullish trend, it’s important to remember that Bitcoin’s value is highly volatile. The cryptocurrency market is known for its rapid fluctuations, and Bitcoin’s price could drop just as quickly as it has risen. Analysts have pointed out that Bitcoin’s current price is driven by short-term euphoria and market speculation. This makes it a risky investment, especially at such high levels.

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Moreover, Bitcoin does not generate cash flows like a traditional business. Its value is based solely on what someone else is willing to pay for it. This makes it difficult to determine its intrinsic value. Unlike stocks or real estate, Bitcoin does not produce income or dividends. It’s a non-productive asset, and investing in it is essentially gambling that its price will continue to rise.

In conclusion, while the recent surge in Bitcoin’s price may be tempting, it’s important to approach it with caution. Investing in Bitcoin at over $100,000 is risky, and there’s no guarantee that its price will continue to rise. It’s crucial to consider the inherent volatility and lack of intrinsic value before making such an investment.

Sources:

https://www.coinspeaker.com/bitcoin-btc-breaks-102k-111k-price-target-sight-strong-etf-backing/

https://blockonomi.com/bitcoin-btc-price-maintains-momentum-as-ibit-etf-reports-major-accumulation/

https://cointelegraph.com/news/100k-bitcoin-analysts-btc-price-prediction

https://www.ccn.com/analysis/crypto/bitcoin-price-targets-fresh-all-time-high/

https://x.com/btc_overflow/status/1879904138420761084


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