Bitcoin jumps 160% in 2023 amid roller coaster ride; What lies ahead?

This year, the crypto space has witnessed a slew of regulatory attacks that tested investors' nerves. But this hard-to-categorize asset class has literally dwarfed every other asset category in comparison to the returns it has generated and rewarded investors by minting money.

Earlier this year, the sector was plagued with many obstacles. Be it FTX, the TerraLuma debacle, the provocation of regulatory ire, lawsuits filed against many major exchanges, several countries closing their doors for fear of the consequences: losing or rather handing over economic power in the hands of private currencies, etc.

Also read: Bitcoin's 160% Rebound in 2023 Is a Bet on ETF 'Demand Shock'

These concerns filled the air with negativity in market prices. It is this situation that caught the attention of smart investors: the large asset-backed institutional investors.

BlackRock, Fidelity, Valkyrie and many others joined the spot bitcoin exchange-traded funds (ETFs), clearly indicating the huge institutional appetite waiting to get their share.

According to a private pollster, it is expected that about $60.6 billion could flow into Bitcoin from combined stock and bond ETFs, and about $9.9 billion from the gold market, totaling about $70. .5 billion dollars in possible new capital inflows.

Currently, the total market capitalization of cryptocurrencies stands at $1.66 trillion.

The year 2024 holds many promises for crypto assets. Artificial intelligence or AI is ready to come into operation, which will create immense potential for the blockchain ecosystem. Decentralized ledger technology (DLT) will play a crucial role in the financial sector. Therefore, creating an appropriate regulatory environment will be a top priority.

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“Looking ahead to 2024, there is considerable excitement within the crypto community regarding the upcoming Bitcoin halving event and various innovations taking place in the Defi space. Approvals of spot ETF applications filed by various institutional investors is also another key event that the industry is looking forward to,” said Rahul Pagidipati, CEO, ZebPay.

These are some of the areas that were worked on during 2023 and are being addressed slowly and surely.

In fact, deliberations on several key issues during the World Economic Forum held in India and around the world helped alleviate some concerns. There is consensus on building a global framework to regulate cryptocurrencies.

“The success of the industry over the next year will depend on fostering a sense of security among consumers. Transparency, strong ethics and values ​​will be the guiding principles for businesses to thrive amidst the dynamic crypto landscape,” Pagidipati said.

Also read: Bitcoin Rising on Rumors in 2023. How to Predict What's Coming Next?

Meanwhile, the CEO of bitcoin mining company Micrastrategy, Michael Saylor, continued to accumulate bitcoins and is now believed to be turning a profit. Saylor started buying cryptocurrencies more than three years ago and at last check he had more than 158,000 bitcoins, worth approximately $4.7 billion.

So far, his company has only sold once: a sale of 708 bitcoins in December 2022, worth $11 million at the time.

There are a few reasons why Saylor accumulates bitcoins. ETF approval by the Securities and Exchange Commission (SEC) and bitcoin halving in April.

According to Saylor, mainstream investors have lacked a “high bandwidth” supported channel to invest in Bitcoin, a gap that the Bitcoin spot ETF is poised to fill.

Following the spot approval of the Bitcoin ETF, the next major event is a supply shock during the April halving, which reduced daily Bitcoin production from 900 to 450.

Cryptocurrencies are still in the nascent stages of growth. There are issues that need to be addressed immediately, such as the safety of investors, while others, primarily fixing ultimate liability in case the protocol or private virtual currency explodes.

Read all the news related to the cryptocurrency market here

Disclaimer: The opinions and recommendations above are those of individual analysts or brokerage firms, and not those of Mint. We advise investors to consult certified experts before making any investment decisions.

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Published: December 26, 2023, 11:22 am IST