The high-risk-reward profile of Bitcoin makes it the most likely to rebound in 2023.
Bitcoin’s (BTC 0.04%) price dropped more than 65% in 2022, making it one of the most divisive cryptocurrencies.
Bitcoin price could fall by 50% in 2023 before the market bottoms. Bitcoin bulls, however, believe that the market has already bottomed and that Bitcoin prices will double by 2023. But, no one can disagree that Bitcoin has one of the best risk-reward profiles in the crypto sphere.
Performance History
A major advantage of Bitcoin is that it has bounced back from miserable years, which is one of its main advantages in risk management. A 58% decline in Bitcoin was recorded in 2014, followed by a rebound in 2015.
There was a similar situation in 2018 when Bitcoin declined by 73% before bouncing back. However, it is essential to remember that past performance does not guarantee future performance, and there has at least been a recovery in Bitcoin in the past.
At least five bear market crashes in the last decade have resulted in Bitcoin’s price recovering. For example, Bitcoin plunged from $32 to $0.01 within a few days following a stomach-churning “flash crash” in 2011. Furthermore, the market experienced a steep decline in 2015, 2017, and 2021.
Therefore, it is unsurprising that Bitcoin will drop off a cliff in 2022. For this reason, so many Bitcoin maximalists are willing to hold on to their coins.
A halving is on the way
Did three of Bitcoin’s worst years (2014, 2018, and 2022) occur within four years? Many analysts have attributed the algorithm that controls the circulating supply of bitcoin as a major contributing factor to Bitcoin’s performance on the crypto market.
As part of the creation of Bitcoin, Satoshi Nakamoto implemented a mechanism known as halving, which occurs regularly. A halving event reduces the mining reward for every new block of Bitcoin by half every four years. Bitcoin’s mining reward is currently 6.25 BTC, and the reward will still be 3.125 BTC in 2024, a half reduction.
In theory, Bitcoin’s value should go up every time it’s halved. The price of Bitcoin rises around 15 months before halving because traders anticipate it. The next halving is scheduled for early 2024, so we should see some price appreciation in 2023.
According to the predictions of crypto hedge fund Pantera Capital, Bitcoin prices will continue to increase throughout 2023 and early 2024 to $36,000 before exploding to $149,000 by the end of 2024. The time is indeed right to join the Bitcoin bandwagon if that is the case.
The global impact of bitcoin
As a final note, we are optimistic about the future of Bitcoin in 2023 as it becomes a global medium of exchange. Bitcoin’s popularity as an online payment option continues to grow each year. The use of bitcoin has continued to flourish in new countries to boost economic growth or improve citizens’ economic conditions.
An act enacted by Brazil in December will provide a comprehensive regulatory framework for using Bitcoin in Brazil as a payment method and investment asset. More countries will follow Brazil’s example so that bitcoin will be more valuable, and it’s just supply and demand.
Bitcoin in 2023: bullish
All of these factors combined make Bitcoin my preferred cryptocurrency at this point. A long history of recovery from difficult years and crashes in the stock market can be found. There is a vital catalyst in place that will enable it to appreciate over the course of 2023 and 2024.
Bitcoin is also gaining popularity as a medium of exchange and a form of payment worldwide.
Bitcoin has traditionally led markets higher or lower, so if crypto is heading higher in 2023, you should consider adding Bitcoin to your portfolio now.
How will Bitcoin fare in 2023?
Undoubtedly, Bitcoin investors will be watching how macroeconomic factors play out and how the Federal Reserve pivots in 2023.
Bitcoin community members hope the current consolidation phase will lead to a price bottom and provide a base for the asset to rise. Bitcoin appears to be poised for a rally, considering that the asset recovered faster after FTX’s collapse than in other capitulation events.
Furthermore, Bitcoin could correct to $9,000 if it finds a bottom. In particular, this level served as the foundation for the last bull run.
Disclaimer: This is a paid release. The statements, views and opinions expressed in this column are solely those of the content provider and do not necessarily represent those of Bitcoinist. Bitcoinist does not guarantee the accuracy or timeliness of information available in such content. Do your research and invest at your own risk.
