Is Bitcoin Still Worth Buying in 2023

Financial analysts argue that bitcoin is dead, but crypto enthusiasts claim that the coin is in for a major comeback. As a crypto newbie, it can be very confusing listening to different conflicting opinions. If this is your situation, then sit back and relax, cause this is the last stop that would help you make that decision.

Analysis of previous trends

Bitcoin has seen its share of bearishness and low market cap in 2022, having lost close to 65% of its value in a year. However, it feels like yesterday when bitcoin reached its all time high a year before, in November 2021, with values exceeding $65000 per bitcoin. A reverse happened in 2022, as prices of many cryptocurrencies crashed and over $1.8 million worth of crypto dissolved. Subsequently, the events following caught bitcoin enthusiasts worldwide unawares. Some of such events include the Terra Luna crash leading to the total loss of $450 billion in the aftermath and a $200 billion loss from the fall of FTX, a large crypto exchange platform that declared bankruptcy.

Will Bitcoin reach an all time high this year?

Since January 2023, Bitcoin has continuously threaded on the $24000 margin, hitting the $25000 mark and trading below. It dropped further following the release of the minutes of the January Federal Open Market Committee meeting which hinted at a sustained interest rate spike if high inflation persists. While the sentiments regarding this and the federal government’s monetary policy and regulations left bitcoin in dark clouds, we have begun to see a silver lining.

Over the past week, bitcoin has seen significant growth and an increase of almost 14%. This steady rise has filled bitcoin investors with hope and the promise of stability of the coin beyond the $30000 price level. Currently, the daily trading volume is at $24,440,052,648 U.S dollars, with a daily transaction count of 332358.0, up from 292748.0 yesterday, a 13.58% increase.

We need to look back to the second week of January when bitcoin crossed the crucial $16800 and picked up pace, way over $20000. Experts believe a repeat is very possible this year at the $30,000 mark.

Also, the bitcoin market is likely to see an improvement in market prices this year, in anticipation of the halving event in 2024 next year, when the rate at which bitcoin is mined would be reduced as the number of coins given as a reward for successfully mining a block is cut in half. A miner’s payout will be reduced to 3.125 BTC. Being one of the factors that gives bitcoin its value, this decreased supply would cause asset scarcity and an increase in price.

Reason for Bitcoin Volatility

Bitcoin prices are volatile and not easily predictable because it has very few metrics that could be used to forecast its price performance. Another major reason for its volatility is the ownership of very large percentages by crypto whales. These owners, or whales, make up only 2% of anonymous ownership accounts but control over 90% of available bitcoins. As such, actions of a single whale would have a significant impact on the market based on the laws of supply and demand. Also, the majority of bitcoin users are retail investors and are prone to trade decisions influenced by user sentiments and government regulations. Since the market is fast and highly speculative, trade decisions are extremely time-sensitive.

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