Is Bitcoin a buy in 2023?


Even after a 71% price loss over the past 52 weeks, Bitcoin (BTC -0.61%) It still has a perfect return of over 12,300% since April 2013 (the earliest point at which price data for the token is available on coinmarketcap.com). This performance far outpaced the returns of the broader market S&P 500 index in the same period. And investors who missed out on profiting from that performance may now be asking if they got in.

I don’t think it’s too late for that Buy bitcoins We are entering 2023. In fact, it’s probably too early.

It has been a difficult year

The unprecedented level of fiscal and monetary stimulus the government and the Federal Reserve have deployed to support the U.S. economy during the coronavirus pandemic, coupled with persistent supply chain problems and shortages caused by geopolitical conflicts, have created high inflation in the United States and around the world over the past year and a half. To combat this, the Federal Reserve has aggressively raised its benchmark interest rates, causing investors to gravitate toward riskier assets, a category in which Bitcoin and cryptocurrencies firmly belong. And this is one of the main reasons why the prices of these assets are falling. Crater in 2022.

Besides, Collapse of FTXOne of the biggest cryptocurrency exchanges has created a panic in the cryptocurrency market. Since the news broke that FTX is facing major liquidity problems and is trying to be acquired by larger rival Binance, the price of Bitcoin has fallen by 8% (as of this writing), reinforcing its 2022 downtrend. FTX has now filed for Chapter 11 bankruptcy protection, and the market will be dealing with the fallout from this scandal for a long time.

The FTX situation could actually be a catalyst for Bitcoin, as it could accelerate the introduction of a clear regulatory framework for cryptocurrencies. But the top cryptocurrency likely won’t be affected by any new regulations, as the head of the Securities and Exchange Commission has previously argued that Bitcoin is a commodity, not a security.

This much-needed regulatory clarity will make Bitcoin a more attractive investment for institutional investors, which could lead to massive capital inflows into the asset and boost its price in 2023.

Bitcoin has a huge upside

Bitcoin was first created in 2008.peer-to-peer electronic money system,” with the first transaction block confirmed in January 2009, its adoption to this point has really only been a vehicle for financial speculation. And that makes sense given that volatile and high-flying tokens attract people looking for a quick profit.

But I think it’s reasonable to think of Bitcoin as a valuable asset — one that investors can use to place their savings. Most people who are cryptocurrency enthusiasts know that there is a limit of 21 million tokens. total number of mined bitcoins. This limited supply should theoretically support a higher price over time as demand increases. As the world becomes increasingly digital, younger generations are likely to seek to keep their wealth in innovative assets like Bitcoin as opposed to gold.

While many people in developed countries with easy access to strong payments and financial infrastructure don’t really appreciate Bitcoin’s potential, those in poor countries certainly understand its benefits. Take Venezuela, for example. The South American country is famous for going through periods of hyperinflation that destroyed the purchasing power of the bolivar. In this unfortunate situation, the citizen of Venezuela would certainly prefer to keep their savings in Bitcoin as opposed to the local currency. At least with Bitcoin, it is impossible for a central authority to manipulate its value.

In addition, Bitcoin may one day establish itself as a reserve currency, meaning it can be used to settle transactions. There is still a lot of progress to be made on this front, especially with regard to transaction speed, payments and ease of use. But the potential is definitely there, especially given the uncontrolled and often harmful control governments have over the money supply and financial systems. I think having a truly decentralized payment system would be a net benefit to the world.

It’s probably a good idea to let the FTX tidal waves settle down a bit before jumping into action, and you might want to wait for some progress on the tuning front as well. Therefore, in November 2022, a Bitcoin investment may jump the gun. But brighter days are ahead and the perfect buying window for Bitcoin should open soon.

Bitcoin still has a long way to go, making 2023 the perfect time to invest for those waiting on the sidelines. The upside is huge, with prices down by nearly two-thirds this year.



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