TOAfter 2022, it only brought pain for bitcoin merchants and cryptocurrency For enthusiasts, the past year has been unforgettable and optimism abounds for the year ahead.
Bitcoin, and cryptocurrencies in general, performed quite well in 2023. Bitcoin was trading at just $16,600 at the beginning of the year, but rallied over $40,000 in December, offering those who bought in January massive 150% returns.
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This is a big change from 2022, when bitcoin and other cryptocurrencies faced major headwinds, culminating in the dramatic collapse of crypto giant FTX and the arrest of the company's founder, Sam Bankman-Fried.
Other digital assets also performed well in 2023. Ethereum, the second-largest cryptocurrency by market capitalization, rose more than 81%, Cardano rose 110%, and Ripple increased its value by around 80%. Even meme coins like dogecoin have posted gains, with the value of one such token rising nearly 32% since the beginning of the year.
Bitcoin has particularly surged in recent weeks, in part due to optimism in the cryptocurrency world that the Securities and Exchange Commission will approve a number of bitcoin ETF applications. The price of bitcoin rose almost 50% in the last two months alone.
Most in the cryptocurrency world think that at least some of the ETF applications will be approved. Bloomberg Intelligence Analysts saying in a recent note that they expect the SEC to approve all applications.
Also adding momentum to bitcoin sales is the expectation that the Federal Reserve has ended its rate hikes and could begin cutting them in the first half of next year.
There is also optimism about bitcoin heading into the new year due to something known as a "halving." The bitcoin halving is an event that will take place in a few months and could be good news for bitcoin and other cryptocurrencies throughout 2024.
The way Bitcoin was designed, roughly every four years, block rewards for Bitcoin miners are halved, reducing the supply of new Bitcoins by 50%. This makes the product a scarcer good and tends to raise the price in the following months.
James Lawrence of Siesta Markets told Washington Examiner that the roughly 18 months following such a halving event have generally been a bull market for the flagship cryptocurrency.
"It's just a continuation of Bitcoin becoming increasingly scarce," he said.
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Predictions about how Bitcoin will fare in 2024 are widespread, although Lawrence is optimistic. He said that he believes the price of bitcoin could reach its previous record of around $69,000 by the end of next year.
“And I could see us flirting with $100,000 in bitcoin heading into next Christmas 2024 or January 2025, like flirting with the six-figure range,” he said.
