The biggest cryptocurrency story in 2023 was not the cohort of Wall Street players like BlackRock, FIdelity, VanEck and others seeking SEC approval to offer a Bitcoin spot ETF, which would track the market price.
It was not Bitcoin Ordinals, digital assets inscribed in a satoshi, that gave life to a hibernating NFT phenomenon and caused controversy in the Bitcoin industry.
It was not Silvergate Capital that closed its operations. Nor the closure of Signature Bank due to regulations. Not even the bankruptcy of Silicon Valley Bank (SVB).
Rather, the biggest cryptocurrency story was the price of Bitcoin itself.
Bitcoin rose from over $5,000 during the start of the pandemic to nearly $68,000 in November 2021, marking the record price for Bitcoin. Until early 2023, the Federal Reserve's series of rate hikes had slowed Bitcoin's price action. Throughout 2022, the asset endured a bear market, falling over 65% as higher rates from the Federal Reserve hurt the entire crypto market. Major cryptocurrency hedge funds and lenders closed and FTX closed.
On January 1, 2023, Bitcoin opened the year at approximately $16,620. That same month, it reached $21,000, matching its price on the day FTX began filing for bankruptcy. While this was unfolding, on November 7-8, 2022, the price of Bitcoin dropped 22% in less than a day.
By February 2023, Bitcoin had already made over 70% gains, easily setting the pace ahead of all other major assets. Bitcoin had reportedly caught a bid among both retail investors and whales.
On June 21, Bitcoin rallied on news that BlackRock was planning to launch a Bitcoin exchange-traded fund (ETF). The Wall Street Journal reported that same week that EDX Markets (Citadel Securities), Fidelity and Schwab also began exploring a Bitcoin ETF.
Bitcoin then skyrocketed to nearly $35,000, the highest point for digital gold in nearly 18 months. That was more than double the price seen in early 2023. On December 4, Bitcoin surpassed $42,000, hitting a 20-month high thanks to expectations of a US interest rate cut and the expectation of an approval of a exchange traded spot bitcoin fund.
Bitcoin was more than two and a half times its New Year's Day price in early December. At the time of writing, the price of Bitcoin was $43,713. Outperforming most, if not all, of the year's top assets. Gold, for example, started the year at $1,823 and at the time of writing is at $2,007.
What could we expect from the price of Bitcoin in 2024?
Bitcoin's impressive 2023 comes just before the fourth Bitcoin halving, which will take place on April 18, 2023. It will cut the Bitcoin block reward from 6.25 bitcoins to 3.125. This is expected to decrease supply and is often associated with price increases in the months following these events. In fact, in the month following the last three halvings, the price of Bitcoin has risen reliably.
Furthermore, optimism over the approval of a Bitcoin ETF by the SEC will surely continue to drive the price. A Bitcoin ETF would make it easier for the general public to gain exposure to bitcointhus creating a larger group of Bitcoin investors.
In line with this, in April 2023, Standard Chartered's head of digital asset research, Geoff Kendrick predicted that Bitcoin could reach $100,000 by the end of 2024 as it declared the โcrypto winterโ over. The reasoning? Shock in the banking sector and stabilization of risk assets as the US Federal Reserve ends its cycle of rate hikes.
"While sources of uncertainty remain, we believe the path to the $100,000 level is becoming clearer," Kendrick wrote.
Kendrick then updated his prediction, suggesting that Bitcoin could reach $50,000 this year and $120,000 by the end of 2024, arguing that a jump in Bitcoin's price would "encourage bitcoin miners to hoard greater supply." Therefore, Bitcoin price action could also be the big cryptocurrency story in 2024.
Kadan Stadelmann
Kadan Stadelmann is a blockchain developer, operations security expert, and CTO of the Komodo platform. His experience ranges from working in operations security in the government sector and launching technology startups to app development and cryptography. Kadan began his journey into blockchain technology in 2011 and joined the Komodo team in 2016.
