After another turbulent and action-packed year, we can safely say that Bitcoin has emerged as the biggest winner of the crypto space for 2023. This is not just because it tops most charts in the industry, remaining the most coveted digital currency and the largest one by market capitalization 15 years after its establishment, but also due to its impressive performance throughout the past 12 months.
Obviously, the fact that Bitcoin has the first-mover advantage and is often conflated with the concept of cryptocurrencies plays a huge role in its ongoing success. What was once regarded as an oddity and the underdog of the financial realm has turned into a major player with the potential to transform perceptions and revolutionize industries. Investing in the flagship crypto has also become easier than ever, with people being able to buy Bitcoin with credit card and other easily accessible methods.
But how exactly did Bitcoin manage to continue its winning streak in 2023? Even the most optimistic analysts recognized that the odds were not looking great for Bitcoin at the end of 2022. However, the last 12 months somehow turned the table in its favor, so we’re going to do a final rundown of Bitcoin’s journey before the year comes to an end and see how things unfolded.
From highs to lows to highs again
Little over two years ago, Bitcoin was writing history, hitting a record high of $68,789. At the time, it seemed like nothing could stop the asset’s ascension to mainstream acceptance. Emboldened by the impressive bull run and the hype of the moment, investors were pouring big money into crypto, with Bitcoin being the asset of choice for most.
Then the unavoidable happened and the king of crypto went into a steep decline along with the entire cryptocurrency market, as a result of the latest and most brutal crypto winter. Bitcoin fell from its peak value to under $18,000 in less than a year, leaving many investors dumbfounded and broke. Bitcoin was no stranger to the sequence of bull and bear markets, but this time the crash was so violent and resounding that led many to believe it would never recover.
The coin started 2023 hovering around $16,000, against a backdrop of low investor confidence and negative market sentiment. However, it wasn’t long until Bitcoin started to bounce back, alternating times of growth with slight drops and periods of stagnation, but keeping on a path of appreciation for the most part and gradually climbing its way out of the slump.
Overall, Bitcoin registered a 180% increase since the beginning of the year, trading at $ 42,543 at press time and reaching a yearly high of nearly $45,000 in December. Those looking to buy Bitcoin might find the current price appealing.Bitcoin’s price at the moment might still be significantly lower compared to the values registered in November 2021, but it can’t be denied that the king of crypto defied all expectations with its impressive recovery, becoming the best-performing asset of 2023. Going from $16,000 to almost $45,000 within a span of just 12 months represents a major achievement for Bitcoin, which is all the more remarkable given the state of the crypto market in 2023, marked by uncertainty and increasing scrutiny from policymakers.
The factors that impacted Bitcoin’s trajectory
Bitcoin’s trajectory in 2023 was shaped by various events and developments, some favorable and some less auspicious. One of the occurrences that blew fresh wind in the sails of Bitcoin was the collapse of the Silicon Valley Bank (SVB). The failure of the then-16th largest U.S. bank turned out to be a blessing for the original crypto as it highlighted the flaws in the traditional banking system and thus increased the appeal of alternative investment venues such as digital currencies. The advantages provided by the decentralized nature of crypto assets were thrust into the spotlight by this incident, so shortly after the collapse, the Bitcoin price surged above $25,000 and the appreciation trend continued into the following months.
Unfortunately, not all developments of 2023 were beneficial to Bitcoin. U.S. regulators started to crack down harder on crypto and that put increasing pressure on market participants. It was an extremely busy year for the U.S. Securities and Exchange Commission (SEC) which filed a total of 784 enforcement actions, targeting both large players in the crypt industry and individuals, including Coinbase, Sam Bankman-Fried, and Kim Kardashian. These measures resulted in almost $5 billion in fines and the reimbursement of money to investors and caused crypto prices to dip on several occasions.
But the biggest catalyst for Bitcoin’s growth this year was Blackrock’s decision to apply for a spot Bitcoin ETF with the SEC. The U.S. regulator had rejected all spot Bitcoin ETF applications in the past, but with Blackrock being one of the most prestigious and successful investment management companies in the world, their action carried more weight than previous attempts.
The potential approval of BlackRock’s filing cast a positive light on the crypto market, as it drew renewed interest for crypto investments and came with the promise of increased legitimacy for the cryptocurrency industry. A string of similar applications from other reputable asset managers followed after Blackrock’s submission, which contributed heavily to Bitcoin’s rally in the second half of the year.
Wrapping up
2023 has been a surprisingly good year for Bitcoin, despite the skepticism that loomed large in the crypto industry after the disastrous events of 2022. The king of crypto performed better than most expected, increasing by 180% and outpacing traditional assets like gold which saw a 10% increase and the S&P 500 which registered a 20% growth. This astounding ascension positions Bitcoin as the biggest winner of 2023, and we can only hope that the next year will bring just as many positive developments for the asset and the crypto market as a whole.
