You have to give credit to Bitcoin promoters – the main digital resource is solid.
To illustrate: Bitcoin (BTC), when traded on Nov. 22, 2022, had a two-year low of $15,480 amid a scandal-filled 2022 and the dramatic collapse of the digital currency market.
But that was in the past and the same is still true today. Bitcoin supporters are once again optimistic.
By the end of February 2023, Bitcoin had increased by more than 40% on a year-on-year basis. This is a strong recovery after a disappointing 2022 and the much-maligned “crypto winter.”
However, it is important to have a sense of perspective when looking at periods of market asset volatility.
“Yes, Bitcoin is up 41% between Jan. 1, 2023, and Feb. 28, 2023,” said Jordan Taylor, an independent financial advisor. “But it’s also down 46% between Feb. 28, 2022, and Feb. 28, 2023.”
When considering whether this is a good investment, gold prices are likely to rise in 2023.
- What is driving Bitcoin’s rise in 2023?
- Projections for Bitcoin appreciation in 2023
- Traders should be wary of BTC
What is Fueling Bitcoin’s Rise In 2023
Crypto experts say there are still many things that can be improved.
“In reality, there are some key issues that may have been hindering Bitcoin’s market cap growth in 2023,” Taylor said.
“That’s a major setback,” he said. “Imagine if the New York Stock Exchange collapsed tomorrow with similar issues? The stock market would be paralyzed.”
The wider money markets have also recovered this year, with the S&P 500 rising around 3% as of March 1. Also, traditional assets of financial institutions have started to stabilize and are indicating a strong future recovery. “Historically, this drives funds away from alternative assets,” Taylor said.
But these negative pressures don’t have to be the only ones. There are many other influential factors that can be pushed. Bitcoin Prices for 2023 are as follows:
Institutional Legitimacy of Cryptocurrency There is an increasing approval of cryptocurrencies by institutional investors and companies. In 2021, for example, major companies such as Tesla Inc. (TSLA) invested billions in Bitcoin, signaling increased mainstream acceptance of digital assets. Although Tesla later redeemed 75% of its investment during the crypto crash, the trend towards global mass adoption continues.
Investors Playing Defense Investors may be concerned about COVID-19, geopolitical conflict, inflation, and other factors that have caused economic uncertainty. Bitcoin is seen as a potential safe-haven asset.
Growth of Crypto as a Payment Option The demand for cryptocurrency is increasing due to increasing acceptance by mainstream banks as a method of payment. Major companies such as PayPal Holdings Inc. (PYPL) have begun to offer cryptocurrency payment options.
Public Policy Shaping Crypto’s Direction Price changes due to regulatory changes also affect Bitcoin. El Salvador made history by adopting the new system as legal tender. Other governments have plans to tighten regulation of cryptocurrency activities, which could further boost the value of Bitcoin.
Cryptocurrencies have been considered to be a potential hedge against economic uncertainty, and this has been demonstrated by Bitcoin’s price growth during the pandemic. As governments are pushing for digital identification, the demand for digital currencies is also increasing. Some have seen cryptocurrencies as an alternative to the traditional banking system, with China’s digital yuan initiative as an example. In Ukraine, the government reported that they were able to raise $60 million through Bitcoin and Ether (ETH) in less than a year after the Russian invasion.
What are the prospects for Bitcoin’s price appreciation in 2023? Market experts appear to be bullish on the street, yet Bitcoin has had difficulty breaking the $25,000 mark since it hit it in February. To really stimulate growth, it will require higher benchmark levels. The market will also be waiting for economic signals from the Federal Reserve and because global macro fundamentals favor U.S. dollars, there could be more setbacks after the run seen in early 2023.
For BTC traders, it is important to do their due diligence. History has shown that buying at the bottom of the market cycle has been rewarded, and Bitcoin has outperformed the stock market by orders of magnitude in the past 10 years. New investors should assess their risk tolerance before diving in and conduct research to map out the Bitcoin market. Additionally, it is recommended to only trade in a regulated environment. As seen with the fallout of exchanges like FTX, this is essential to protect your money.
