There are plenty of reasons to be bullish on Bitcoin (BTC -2.91%) right now. The world’s most popular cryptocurrency just broke the $125,000 price level, setting a new all-time high. For the year, Bitcoin is now up a robust 32% as of October 8, and all signs appear to be flashing green right now.

The growing consensus appears to be that Bitcoin has a legitimate chance of hitting $150,000 by the end of the year. Some even think Bitcoin might clear the $200,000 hurdle. Should you consider buying Bitcoin right now?

1. Bitcoin as “digital gold”

The key factor sending Bitcoin to a new all-time high in October is a growing lack of trust in fiat currencies, specifically the U.S. dollar. In fact, Wall Street traders are calling this the “debasement trade.” As fiat currency gets debased, there is a flight to quality into gold and Bitcoin. Both are up big this year.

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Bitcoin is often referred to as “digital gold.” Many institutional investors view it as a hedge against inflation, macroeconomic uncertainty, and geopolitical risk.

And that’s exactly what’s going on right now. The federal government has shut down. Wars loom on at least three major continents. And nobody seems able to figure out what’s going on with tariffs and global trade.

Thus, there’s good reason to think that, as long as gold trades higher, so will Bitcoin. So if you think gold is headed higher — perhaps well beyond $4,000 — then Bitcoin is likely to follow right behind.

2. Monetary easing by the Federal Reserve is a price catalyst

At the beginning of the year, there was a broad consensus that Bitcoin would double in value, from $100,000 to $200,000, by the end of 2025. While that’s looking unlikely right now, a number of top analysts are actually doubling down on this prediction.

For example, Tom Lee of Fundstrat thinks Bitcoin will “easily” hit the $200,000 level. He thinks that monetary easing from the Federal Reserve will help to push up Bitcoin’s price. If history is any guide, then this is likely to be the case. After Fed rate cuts, money tends to move into riskier, more speculative assets such as Bitcoin.

The big question, though, is just how much easing the markets have already priced in. If the Fed is not aggressive enough in the eyes of traders, then the price of Bitcoin might actually retreat.

3. Buying from big institutional investors

Recently, Citigroup analysts issued a price target for 2025 and 2026. The bank thinks that Bitcoin will get to $132,000 this year before eventually hitting $181,000 by the end of next year. That’s based on strong buying pressure from institutional investors, who continue to invest heavily in spot Bitcoin ETFs. Generally speaking, as more money moves into these spot ETFs, the spot price of Bitcoin has nowhere to go but up.

At the same time, massive institutional demand is coming from the Bitcoin treasury companies that are buying and hoarding Bitcoin. All told, the top 100 Bitcoin treasury companies hold over 1 million BTC, or approximately 5% of all Bitcoin in circulation. The leader here is Strategy (MSTR -3.23%), formerly known as Microstrategy, which has accumulated an incredible $80 billion worth of Bitcoin on its balance sheet.

What could possibly go wrong?

Bitcoin has historically been a volatile and speculative asset, prone to periods of intense boom and bust. Typically, Bitcoin moves in four-year cycles, and there is good reason to think that Bitcoin could be nearing the end of the current four-year cycle.

Just think back to the period of November 2021, which was almost exactly four years ago. Bitcoin looked unstoppable, eventually cruising to a (then) all-time high of $69,000. But then the bottom fell out of the market, the price of Bitcoin crashed, and crypto market participants lamented the onset of crypto winter.

So before you back up the proverbial truck and load it with Bitcoin, be sure you understand the risks involved. Bitcoin is a fantastic long-term investment, but no iron law of crypto guarantees its price will always rise.