Bitcoin saw a price slump of more than 60% in 2022. We also witnessed many crypto collapses, such as those of TerraUSD and the FTX exchange. The macroeconomic climate also worsened last year. Many investors are wondering what will happen next. Is bitcoin a bubble? Or will it rise in 2023?
The short answer is no; bitcoin is not a bubble. At the time of this writing, bitcoin’s price has risen to $22,000 and the daily trading volume stands at over $25 billion. Crypto experts believe that bitcoin will witness more gains as it has crossed the resistance level of $20000.
One of the main reasons analysts are bullish on bitcoin is due to the halving event next year. The bitcoin rewards to its miners are cut in half during a halving event, which takes place every four years. Halving events are viewed as positives for Bitcoin’s value as they help reduce supply. Past halving events have brought momentum to Bitcoin’s price.
By examining the halving data, past halving events are long-term drivers for Bitcoin’s price. The halving event reduces the supply of bitcoins, which helps to increase their price. The total supply of bitcoin is capped at 21 million and cannot be produced further once all Bitcoins are in circulation.
The other reason for Bitcoin to bounce back in 2023 is that the US Fed can slow interest rate hikes. This slow rate hike might help Bitcoin maintain its upward price trajectory. Additionally, there is evidence that large crypto investors, known as ‘Bitcoin Whales’ have started accumulating bitcoin again. According to Santiment, bitcoin whales are holding between 1000 and 10,000 BTC in their crypto wallets. This data indicates that large investors are accumulating BTC, and bitcoin is on a high recovery path.
Why is Bitcoin not a bubble?
Bitcoin is increasingly going mainstream. Many traditional financial institutions enable the trading of bitcoin and other cryptos. Additionally, crypto futures markets are being established. Large financial institutions like PayPal are making it easy to buy or sell Bitcoin and other cryptos on their platforms. Companies like Block have invested millions of dollars in Bitcoin. MicroStrategy, a business intelligence software company, increased its bitcoin holdings by 2,500 BTC at the end of last year. Currently, MicroStrategy holds a total of 132,500 BTC.
Bitcoin has the potential to revolutionize global finance by placing control in the hands of users. No government or group controls this decentralized digital asset. This characteristic allows bitcoin to be free of corruption, rampant in fiat currencies.
This digital asset is not controlled by any nation; this enables users to send money to family or friends across international borders securely and with low fees. This feature can help low-income immigrant workers send money back home instantly and securely. Users in unstable economies can safeguard their assets against high inflation, political unrest, and regulatory uncertainty.
Read more: What is Crypto
Prominent Corporate Leaders Think Bitcoin Has a Bright Future
Marc Andreessen is a tech entrepreneur who invented one of the first internet browsers. Marc has also backed companies like Meta, Airbnb, and Slack as a venture capitalist. Marc has always been bullish on bitcoin, and his investment firm has put money into many crypto-related projects. In 2014, he wrote an op-ed called ‘Why bitcoin matters’, where he mentions that bitcoin can reimagine how the financial system should function in the internet era.
Jack Dorsey, the former founder of Twitter and the CEO of Block, the parent company of Square and Cash App, has always backed Bitcoin. During a Bitcoin conference in 2021, Jack stated that there is nothing more important to him than working on bitcoin. He also stated that bitcoin stands out against all other cryptos.
There are several predictions on Bitcoin; some are bullish and some are bearish, but one thing can be said for sure that it is not a bubble. Bitcoin has made huge comebacks in the past and is known for its resilient nature. Many experts in the past decade have predicted that the bitcoin bubble will burst, but the largest crypto coin is still here, and experts predict that it will see a big price rise this year.
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