Cryptoverse: Bitcoin defies its doubters in 2023. The year 2023 has been the year of healing after the trauma that occurred in 2022, the year that “broke bitcoin.”

Although prices have been falling, trading volumes have been low, and the economy has been challenging, Bitcoin has managed to rebound. It saw a resurgence in October after a slump over the summer.

“We’ve had a nice recovery, but we’re just on the cusp of the new cycle,” said Kevin Koh, co-founder and managing partner at the investment company Spartan Group. “We’re just in transition.”

Indeed, 2023 has been a year that has been remarkably favorable for Bitcoin. Since the first of the year, the cryptocurrency that reigns supreme has had a 164% increase in value and is currently selling at more than $40,000. Gold has increased by 10%, and the S&P 500 (.SPX), which has gained 20%, has surpassed this asset, beating traditional assets.

In addition, according to data provided by CoinGecko, Bitcoin’s stake in the whole cryptocurrency market climbed from 38 percent to more than 50 percent. The total value of the cryptocurrency industry has increased to $1.7 trillion, up from $871 billion at the end of 2022. The price of ether has increased by 95% over this period.

The majority of bitcoin’s gains occurred later in the year when both the possibility of a spot bitcoin exchange-traded fund (ETF) in the United States and the expectation of monetary policy that is more lenient rekindled investor interest.

According to CCData, the total spot and derivatives trading volume on centralized exchanges reached $3.61 trillion in November, an increase from about $2.9 trillion in January. This indicates that trade volumes have also begun to pick up again.

Stablecoins, cryptocurrencies whose value is tied to a real-world asset such as the dollar, have also contributed to the growth of the cryptocurrency market. The market capitalization of Tether, the largest cryptocurrency of its kind, has reached an all-time high of more than $90 billion.

A DOWNFALL OF TITANS

Following a turbulent year in 2022, which saw the collapse of FTX and Sam Bankman-Fried, the year 2023 has witnessed the collapse of further crypto heavyweights.

Changpeng Zhao, the chief executive officer of Binance, has entered a guilty plea to violating anti-money laundering rules in the United States. This is a significant aspect of a multi-billion-dollar settlement with authorities. Alex Mashinsky, the creator of Celsius, was arrested in the United States in July and pleaded not guilty to several criminal allegations, including securities fraud. The co-founder of Voyager Digital similarly found himself on the receiving end of regulatory proceedings in the United States.

Additionally, it is essential to remember that SBF, the erstwhile industry poster child, was found guilty of fraud in November following a whirlwind trial.

On a more positive note, Ripple’s XRP token saw gains of 82% for the year after a significant legal success for the sector. This triumph came in the form of a ruling by a court in the United States that Ripple Labs’ token offerings on public exchanges did not violate securities legislation.

BTC IN THE YEAR 2024

Bets that a spot bitcoin exchange-traded fund (ETF) will be authorized in the United States and attract money from regular and institutional investors alike on the convenience of acquiring exposure to the digital asset on a regulated stock exchange have been attributed to the majority of the 55% run that bitcoin had in the fourth quarter for the cryptocurrency.

Thirteen businesses have submitted applications to the United States Securities and Exchange Commission for the multi-billion-dollar product. Some organizations that have submitted applications include asset management heavyweights such as BlackRock and Fidelity.

In the first few days of trading, it is anticipated that such a fund will attract as much as $3 billion from investors, and after that, it is anticipated to attract billions more.

On the other hand, not everyone is as bullish. Even though J.P. Morgan anticipates that the recovery of the cryptocurrency market will continue through the anticipated legalization at the beginning of 2024, the company continues to be suspicious of the amount of success in adoption that the broader market is pricing.

Regarding the $1.7 trillion cryptocurrency industry, JPMorgan anticipates that bitcoin exchange-traded funds (ETFs) will attract assets in the low or mid-single-digit percentage range. This is in contrast to some bullish outlooks of 10%.

According to the report, cryptocurrency markets might reverse their recent gains if adoption does not meet investors’ expectations, which are about 10%. From the perspective of certain market observers, however, it appears that the recent rebound of bitcoin is still in its early phases.

The net dollar-denominated realized profit that Bitcoin investors have locked in has reportedly reached $324 million per day, according to the analytics platform Glassnode. This figure is significant since it is an order of magnitude lower than the heights achieved during the bull market’s closing stages in 2021, when the daily profit exceeded $3 billion.

According to Glassnode, this indicates that the present performance of Bitcoin is still very much within the parameters of an early-stage bull market rather than a late-stage bull market that is now functioning.