Since January 1 this year, Bitcoin has grown by 164% and is trading above $40000. The world’s biggest crypto Bitcoin has truly been on a roller coaster ride this year. Mainstream investors have focused more on Bitcoin compared to any other year. Cryptocurrencies like Bitcoin have drawn a lot of attention from international financial institutions. Therefore, it is essential to understand the driving factors behind this impressive performance.
A Glimpse of Bitcoin’s Performance in 2023
The world’s biggest crypto Bitcoin’s 2023 journey began with a value of over $16,000. The cryptocurrency gained 68% in the first three months. This was one of the best quarterly performances in the last two years. As the months progressed, Bitcoin continued to surprise investors and enthusiasts alike. Now, at the beginning of December, the value of Bitcoin was around $45,000. The surprising trend about Bitcoin is that it sometimes surges ahead of traditional assets including gold. For instance, gold’s growth rate was 10%, S&P 500’s growth rate was 20%, but Bitcoin rose by over 164% in 2023.
The most interesting facet of Bitcoin’s performance is that its market share has increased manifold. Earlier Bitcoin’s market share was only 38%, now in 2023, it has crossed 50% according to CoinGecko data. These glimpses show that Bitcoin’s popularity has extraordinarily increased in recent years. Therefore, it is necessary to figure out what were the extraneous factors responsible for the impressive performance of Bitcoin.
Extraneous Factors Behind Bitcoin’s Rise
Bitcoin’s price is undoubtedly volatile just like other cryptocurrencies. However, there are reasons why it is the world’s biggest crypto. Unlike other cryptos, this year was significant for Bitcoin because it touched $16500 levels and on July 14, it crossed $31,500 levels. Therefore, some notable extraneous factors helped Bitcoin to grow unprecedentedly.
Potential Approval of SEC
The credibility of Bitcoin has increased in the eyes of the common masses. This credibility factor is further enhanced by the fact that Bitcoin spot exchange-traded funds are going to be approved by the US Securities and Exchange Commission (SEC). An approval will certainly make Bitcoin more credible for a wide range of retail and institutional investors. This anticipation may generate the much-needed hype around the Bitcoin ETF.
BlackRock Company’s Renewed Enthusiasm
BlackRock is one of the largest financial companies in the world. In 2023, it showed a lot of enthusiasm for Bitcoin. BlackRock’s influence and stature in the crypto world have increased considerably because of CEO Larry Flink’s political affiliations. Under him, the company now focuses a lot on spot Bitcoin ETF. This same ETF may be included in Depository Trust and Clearing Corporation (DTCC). Though this inclusion may take some time to materialize, there was growing enthusiasm among crypto traders.
Poorer Performance of Other Assets
2023 is a memorable year for Bitcoin because it has outperformed most other assets including gold. For example, Bitcoin rose by approximately 180% from January to December. Only a handful of individual equities were able to perform better than Bitcoin. The Binance controversy in 2023 also did not affect the prospects of Bitcoin. This shows that this cryptocurrency is quite resilient in the crypto market.
Prospects of Bitcoin in 2024
Bitcoin’s impressive performance this year may well continue next year, provided the external factors remain stable and favorable. Asset management companies like Fidelity and BlackRock have given their applications to include Bitcoin in the SEC. This may further improve its prospects. Experts believe that the inclusion may pull in as much as $3 billion from potential investors in the first few days of trading.
Bitcoin Automated Teller Machines (BTM) machines are also becoming very popular. These machines provide a gateway to the cryptocurrency world. These have an intuitive interface and robust security features. Bitcoin ATMs too have an enormous potential to bridge the divide between digital and conventional financial realms. Therefore, it is not an exaggeration to suggest that crypto enthusiasts may continue to gain a lot next year.
Also Read- Bitcoin Mining Can Help Countries Facing Water Scarcity
Bottom Line
2023 has been a spectacular year for Bitcoin given its consistent growth and phenomenal rise in value. Several extraneous factors indeed contributed to this growth. However, the growth also indicates that an increasing number of people are trusting Bitcoin and using it for investment and trading purposes. Governments around the world are also rethinking their strategy to accept cryptocurrencies, especially Bitcoin. These moves may further popularize Bitcoin.
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