Will 2023 be the year of Bitcoin? As many of our readers know, “on the fifth day of Christmas, my true love gave me five golden rings.” What’s better than that? Five digital gold rings.
Bitcoin’s status as digital gold is undeniable. Being rarer than its metal counterparts and offering better price protection, Bitcoin is billed as the “five gold rings” of the crypto industry.
At the end of the year, let’s take a look at Bitcoin and see how the asset has fared over the years for investors.
2022 – Not Bright For Bitcoin?
Rising to an all-time high of $68,789 in November 2021, investors are feeling positive and have high hopes for Bitcoin as enthusiasts pray for a bounty Best of Santa.
Bitcoin hitting $100,000 is perhaps the most expensive price prediction for the most valuable crypto. Standard Chartered analysts, Voyager Digital CEO Steve Ehrlich, Goldman Sachs analyst Zach Pandl, Messari founder and CEO Ryan Selkis, and Bill Barhydt, head of the crypto exchange Abra, are among the famous people discussing the statement.
Although there are high price predictions for Bitcoin, $100,000 seems to be an unspoken confirmation of its value in 2022. However, winter blizzards hit, sending the Bitcoin price back below $16,000, its lowest price in more than two years.
Timeline Of The Crisis
Although Bitcoin has gone through many crypto winters, the last one was in 2018, this year turned out to be different. Here’s how the 2022 bear market unfolded and how Bitcoin survived the rest of the winter.
Economic Factors
Since the inception of Bitcoin in 2009, the market has been one of the largest and longest bull markets in history. However, as the sector entered its first real recession since 2009, it was only fitting that Bitcoin would follow suit. This is especially the case because of Bitcoin’s positive relationship with the stock market. In 2022, the Federal Reserve raised interest rates for more than half a year as inflation reached its highest level in four decades. The recession also contributed to the brightness of Bitcoin 2022.
Failure of TerraUSD and LUNA
In May, the algorithmic stablecoin TerraUSD (UST) lost its peg to the dollar, leading to the collapse of the $60 billion Terra ecosystem. The reason sent Bitcoin into the sledge as it recorded one of the biggest one-day losses in its history. However, Bitcoin will recover, rallying to $30,000 within 12 days.
Sudden Bankruptcy
There is a lot of frost coming as the above two points have caused a lot of sudden cold trading accounts among the top crypto companies including Celsius Network, Three Arrows Capital, BlockFi, Voyager Digital and FTX. The latter will end up suffering the most.
A Gold Performance All The Same
Although it has been a tough year for major cryptocurrencies, there are some bright spots among the dark clouds. One bright spot is that Bitcoin has outperformed all other assets in trading and institutional investor adoption.
The Real Rise in Bitcoin Adoption
As of August 2022, there are over 84.02 million Bitcoin wallets out of 76.32 million registered wallets. There has been a huge increase in the number of investors holding Bitcoin.
On December 7, the number of wallet addresses with a balance of at least 0.1 BTC rose to an all-time high, now more than 4.1 million addresses. The number of addresses holding 1-10 BTC also affected the high number of 800,000 addresses on November 28.
The Future of ETFs is Still Bright
Futures ETFs are the golden bearers of the crypto winter. The large amount of attention received from retail investors has helped many funds achieve record sales and perform well despite major market disasters.
On November 8, the trading volume of the ProShares Short Bitcoin Strategy ETF (BITI) increased by 366% since its inception, while the ProShares Bitcoin Strategy ETF (BITO) exceeded its previous high of 64%.
Bitcoin is More Secure Than Ever
The Bitcoin network has never been safe, with its hashrate hitting multiple all-time highs in 2022. Bitcoin hashrate exceeded 321 Exahashes per second for the first time in 2022 and exceeded the value three times after November 12.
At the end of the bull run, investors are expecting a big bull run for Bitcoin ahead of time. It is almost certain that the next year will be a big one for Bitcoin, so here is our opinion for Bitcoin in 2023.
A Real Bull Run For Bitcoin?
With Bitcoin barely out of the woods, the bear market may extend into early 2023. However, there is a general consensus that 2023 will be an uneventful year.
