While 2022 put a strain on Bitcoin, 2023 has been its recovery year after the trauma. Despite low trading volumes and economic challenges, Bitcoin has shown resilience and staged a comeback, particularly gaining momentum since October after a summer downturn.
Kevin Koh from Spartan Group sees this as the dawn of a new cycle for Bitcoin, marking a promising turnaround in 2023.
Surprisingly, Bitcoin has flourished this year, surging by 164% since January and maintaining a value above $40,000. It has outpaced traditional assets like gold and the S&P 500, while also reclaiming a larger share of the total crypto market, soaring from 38% to over 50%.
The rise in Bitcoin’s value came later in the year due to speculation around a potential U.S. spot Bitcoin ETF and expectations of relaxed monetary policies, which renewed investor confidence.
Trading volumes have also increased, hitting $3.61 trillion in November from about $2.9 trillion in January. Additionally, stablecoins like Tether have witnessed substantial growth, reaching a market cap of over $90 billion.
However, amid Bitcoin’s recovery, the cryptocurrency landscape has witnessed the fall of prominent figures like Changpeng Zhao of Binance and SBF, facing legal issues and regulatory challenges.
Yet, there have been positive strides too, notably Ripple’s XRP token gaining 82% following a significant legal victory.
Looking forward to 2024, expectations are high, mainly revolving around the potential approval of a spot Bitcoin ETF in the U.S. Asset management giants have submitted applications, projecting a substantial influx of funds into the crypto market.
Despite optimism, some like J.P. Morgan remain cautious, expecting a slower rate of adoption than what the market anticipates. This cautiousness stems from the belief that if adoption falls short of expectations, the crypto market might witness a reversal of recent gains.
While Bitcoin’s recovery seems robust, measures like the net dollar-denominated realized profit locked in by investors suggest it’s still early in the stages of a bullish market rather than reaching its peak. Glassnode’s analytics indicate that Bitcoin’s current performance aligns more with an early-stage bullish market.
