You’ve got to give Bitcoin enthusiasts credit where it’s due — the cornerstone cryptocurrency asset is robust.
Consider the following: Bitcoin (BTC) was on the ropes as U.S. securities authorities closed in on the cryptocurrency industry after a scandal-ridden 2022, including the catastrophic collapse of Sam Bankman-FTX Fried’s exchange. Bitcoin’s price reached a two-year low on November 22, 2022, dropping to $15,480 throughout the trading day. Nevertheless, that was then, and this is now, as Bitcoin supporters are once again optimistic.
Bitcoin was up more than 40% year-to-date until the end of February. It significantly improved from 2022, when Bitcoin dropped 64% during the much-maligned “crypto winter.” As always, context is essential when examining any period of market asset volatility in further detail. True, Bitcoin increased by 41% between January 1, 2023, and February 28, 2023, according to Jordan Taylor, an independent financial planner at Core Planning. Bitcoin likewise declines by 46% from February 28, 2022, and February 28, 2023.
Consider the following considerations when determining if Bitcoin will climb even more in 2023, making it a potentially lucrative investment:
What is driving the rise of Bitcoin in 2023?
Bitcoin could and should be doing better, say crypto experts. “In reality, many significant obstacles may have impeded Bitcoin’s market value rise in 2023,” writes Taylor.
Taylor cites the protracted legal fights that have engulfed large crypto exchanges, including the demise of a significant institution like FTX. “This is a significant setback,” he adds. “Imagine if the New York Stock Exchange fell tomorrow with similar issues? The stock market would cease to function.”
The larger financial markets have also risen this year, with the S&P 500 up almost 3 percent as of March 1. Nevertheless, conventional financial assets have started to recover and show promise of robust future recoveries. “Historically, this has caused investors to abandon alternative assets,” adds Taylor.
Yet there are also positive pressures at play. In 2023, other crucial variables are driving the price of Bitcoin upward, including:
Institutional validity of cryptocurrencies. The adoption of cryptocurrency by institutional investors and companies is increasing. For instance, in 2021, big corporations like Tesla Inc. (TSLA) invested billions of dollars in Bitcoin, indicating the growing acceptability of digital assets in the mainstream. Although Tesla sold 75% of its crypto assets a year after the market crisis, the worldwide trend of widespread adoption persists.
Investors were playing defense. Due to economic instability caused by the COVID-19 pandemic, geopolitical strife, inflation, and other problems, some investors regard Bitcoin as a viable safe-haven asset.
Crypto’s rise as a payment alternative. The growing public adoption of cryptocurrencies also drives Bitcoin demand as a payment method. Analysts say that large corporations such as PayPal Holdings Inc. (PYPL) have started to provide cryptocurrency payment choices, and the sector is developing.
The direction of public policy is toward cryptography. Changes in global regulation influence the price of Bitcoin. El Salvador has become the first nation to recognize Bitcoin as legal cash, and more nations may soon follow. Meanwhile, some countries have indicated intentions to regulate cryptocurrencies more stringently, which might affect their value.
How to circumvent the financial system. It is not a secret that cryptocurrencies can offer a buffer against economic uncertainty, as proven by Bitcoin’s price increase during the epidemic. The push toward digital identification by governments is also fuelling demand for cryptocurrencies, although Bitcoin investors are transitioning to new hedging tactics.
For instance, China’s digital yuan initiative has encouraged some to regard cryptocurrencies as a viable alternative to conventional banks for keeping and moving capital. In addition, cryptocurrency has been an integral element of Ukraine’s defensive plan since the February 24, 2022, Russian invasion. Less than a month after requesting crypto contributions on social media, the Ukrainian government claimed to receive $60 million worth of Bitcoin and Ether (ETH).
Chances of Bitcoin Price Growth in 2023
Where does Bitcoin go from here in the near and far future? Market gurus appear to be on the positive side of the street, but they’re walking gingerly. Bitcoin is off to a strong start in 2023, according to Joel Kruger, market strategist at LMAX Group, a London-based foreign currency, and cryptocurrency trading business. “The market has done a decent job pricing out the majority of the negative from the 2022 impact and has been eager to capitalize on lower prices and encouraging news on sustained institutional adoption.”
But, Bitcoin has yet to advance after reaching $25,000 in February, and it will need greater benchmark levels in the future to stimulate development. By lunchtime on March 2, the price of Bitcoin was barely below $23,300. “In terms of price activity, the market has yet to establish itself above significant resistance above $25,000,” Kruger adds. “We feel that this block must be cleared for any optimistic view to be strengthened and investors to be prepared for the commencement of the next significant push upward and ultimate break past the record high.”
Until then, Bitcoin might have pullbacks after its rapid surge in early 2023, mainly as investors await further economic signals from the Federal Reserve and as global macro fundamentals favor the U.S. currency. “Any short-term losses are nothing more than enticing chances to acquire long-term exposure to Bitcoin,” argues Kruger. “Investors will likely choose a deflationary, limited-supply, completely decentralized asset engineered to gain in value over time.”
For BTC Traders, Due Diligence Is Crucial History is currently on Bitcoin’s side.
“Buying at the bottom of the market cycle has always paid well, whether in equities, gold, or cryptocurrencies,” says Michael Terpin, CEO of the global blockchain consultancy company Transform Group. “But, investors must treat Bitcoin as an asset class seriously; therefore, you must do your study.” In fact, “it has outperformed the stock market by magnitudes” over the last decade, according to Terpin.
Itai Avneri, the deputy CEO of INX, a cryptocurrency and token trading platform, advises new investors patiently awaiting a chance to acquire Bitcoin to do their due diligence before purchasing. “Before plunging in, evaluate your risk tolerance and do research,” he advises. Avneri adds that charting the Bitcoin market is essential.
Avneri states, “The digital financial ecosystem provides many investment options and instruments, each with advantages and disadvantages.” “Most essential, regardless of where you reside, you should only trade in a controlled environment.” “As we’ve seen with the collapse of exchanges like FTX and others, it’s crucial to safeguard your funds, and regulatory barriers are the only way to do so,” he argues.
