BITCOIN has hit a new record high, with the world’s largest cryptocurrency surpassing $120,000 (£89,000) for the first time.
The digital currency climbed to over $122,000 (£90,438) on July 14, having doubled in value over the past year.
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Analysts say the surge is partly down to Donald Trump’s strong support for cryptocurrency.
The American President has called himself the “crypto president” and is currently trying to pass new laws that would regulate cryptocurrency in the US.
This week has been dubbed ‘Crypto Week’ in America, with the US House of Representatives debating a series of bills to provide a regulatory framework for the $3.8trn market.
Dan Coatsworth, investment analyst at AJ Bell said: “Donald Trump has talked about making America the crypto capital of the world, and now the market is hoping those words become reality.
“The crypto’s price movement implies that investors and traders are expecting something significant during Crypto Week, as bitcoin has now risen by nearly 10% in just five days.”
Meanwhile, some analysts are predicting the value of Bitcoin could climb even further.
IG market analyst Tony Sycamore said: “It’s been a very, very, strong move over the past six or seven days and it’s hard to see where it stops now. It looks like it can easily have a look at the $125,000 level.”
What is cryptocurrency?
Cryptocurrencies are digital assets created using blockchain technology, making them different from physical currencies such as the pound.
Part of their appeal is that they are not controlled by governments or a central bank, such as the Bank of England.
This means the currency can be used to transfer wealth outside of the traditional banking system, making it easier to cross borders and stay anonymous.
Bitcoin is the world’s first, largest and most valuable cryptocurrency, but its rise has helped other cryptocurrencies also grow in value, such as Ethereum.
From January 2026, anyone holding crypto like Bitcoin, Ethereum, or Dogecoin must provide personal details to each crypto service provider they use.
HMRC, which is introducing the rules to crack down on unpaid crypto profits tax, has warned that failure to comply could result in a £300 fine.
Should you invest in crypto?
If you’re considering investing in Bitcoin or other cryptocurrencies, it’s important to be aware that there are high risks involved.
Investing is not a guaranteed way to make money, so make sure you know the risks and only invest in things you understand.
Hargreaves Landsdown investment and markets analyst Susannah Streeter says a “historic shift” is happening for cryptocurrency thanks to President Trump’s vast support and the regulation going through the US Congress this week.
However, she warns that wide-spread adoption of regulation is “still a long way away”.
This lack of regulation means you won’t have any protection if you decide to invest. For example, you won’t be able to make a complain to the Financial Ombudsman Service if things go wrong.
Streeter also warns that the market’s unpredictable nature makes it a risky investment.
“Bitcoin has a history of rapid surges in value, followed by sharp falls, and for speculators it’s very difficult to time the market.
“So, it’s still worth treading very carefully in the crypto universe and only trade in Bitcoin or other coins and tokens with money you can afford to lose,” she says.
UK Crypto asset businesses must register with the Financial Conduct Authority – and you can check to see if they are on the Financial Services Register or if they are on a list of firms with temporary registration.
To minimise risk, any kind of investing should only be done when you have a pot of “rainy day” cash savings in place that you can call upon in an emergency.
As a general rule of thumb, you should have between three and six months worth of income in easily accessible savings.
If you haven’t invested cash before, you may want to start out on more traditional investments through a stocks and shares ISA.
Although they can fall in value, there is a greater track record of them rising in the long term.
The dangers of investing in crypto
HERE are five key risks to keep in mind when investing in cryptocurrencies:
- Consumer protection: Many cryptocurrency investments promising high returns are not fully regulated, apart from anti-money laundering rules. This means you may have limited protection if things go wrong.
- Price volatility: Cryptocurrency prices can rise and fall dramatically, making it easy to lose money. It’s also difficult to reliably determine their value.
- Product complexity: Crypto products and services can be complicated, which makes it hard to understand the risks. Plus, there’s no guarantee you can convert your cryptocurrency back to cash—it depends on market demand and supply.
- Charges and fees: Crypto investments often come with high fees, which can eat into your returns. These fees are often higher than those for regulated investments.
- Marketing hype: Some firms exaggerate potential returns or downplay the risks involved. Be cautious of flashy promotions.
It’s essential to only invest in cryptocurrency if you fully understand how it works and the risks involved.
Remember, there’s no guarantee you can exchange it for real cash, and its value can change drastically in a short time.
If something sounds too good to be true, it probably is.
Always double-check with a trusted friend or advisor if you’re unsure.
Be wary of glowing websites or perfect reviews – fraudsters often create convincing scams.
For tips on avoiding scams, check out our guide.
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