After 2022 brought little but pain for bitcoin traders and cryptocurrency enthusiasts, this past year has been one for the books — and optimism abounds for the year ahead.
Bitcoin, and cryptocurrencies more generally, performed quite well in 2023. Bitcoin was trading at just about $16,600 at the start of the year but charged to over $40,000 in December — offering those who bought in January massive 150% returns.
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That is a big turnaround 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 cap, has surged by more than 81%, cardano has risen by 110%, and ripple has increased some 80% in value. Even meme coins like dogecoin have posted gains, with the value of one such token rising nearly 32% since the start of the year.
Bitcoin has particularly risen in the past few weeks, in part due to optimism in the crypto world that a number of applications for bitcoin ETFs will be approved by the Securities and Exchange Commission. The price of bitcoin rose nearly 50% in the past two months alone.
Most in the crypto world think that at least some of the ETF applications will get approved. Bloomberg Intelligence analysts said in a recent note that they expect the SEC to approve all of the applications.
Also adding wind to bitcoin’s sales is building anticipation that the Fed is done with its rate hikes and could begin cutting in the first half of next year.
There is also optimism for bitcoin heading into the new year because of something known as “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, about every four years, the block rewards for bitcoin miners get slashed in half, reducing the supply of new bitcoins by 50%. That makes the product a scarcer commodity and tends to raise the price in the following months.
James Lawrence of Siesta Markets told the Washington Examiner that the approximately 18 months after such a halving event has typically been a bull market for the flagship cryptocurrency.
“It’s just kind of a continuation of bitcoin getting more and more scarce,” he said.
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Predictions for how bitcoin will fare in 2024 are all over the board, although Lawrence is optimistic. He said that he thinks the price of bitcoin could go as high as its previous record of about $69,000 by the end of this coming year.
“And I could see us flirting with $100,000 bitcoin going into next Christmas 2024, or January 2025 — like flirting with the six-figure range,” he said.
