The year 2022 has not been favorable for Bitcoin. The bears had dominated the market, pushing down the price of Bitcoin to two years low at $15462. While Bitcoin, on average, lost over 70% of its value this year, other assets, including stocks, commodities, bonds, properties, etc., lost great value, too but not to the same extent as Bitcoin. Thus, assets such as Bonds, Gold, Silver, oil, etc., have performed comparatively better than Bitcoin in 2022.
With this poor performance witnessed by Bitcoin this year, many now suppose that the year 2023 will be an opportunity for Bitcoin to prove itself once more as the most volatile asset capable of yielding higher returns over time. Can Bitcoin meet up with this expectation? Is it possible for Bitcoin to outperform other assets in 2023? This work has examined these pressing questions.
What is Bitcoin?
Bitcoin is a popular digital currency created in 2009 by an anonymous individual or group known as Satoshi Nakamoto. It uses cryptography to secure transactions, control the creation of new units, and verify the transfer of assets. Bitcoin runs on a decentralized network which means it is not controlled by any single entity and is not subject to government regulation. It further records all its transactions on a public ledger called the Blockchain, which is maintained by a network of computers around the world. The main purpose of Bitcoin from its creation has been to serve as the trusted means for online payment, which does not require a third party as we find in the traditional banking system today.
What Does 2023 Look Like for Bitcoin?
It is impossible to predict what the future holds for Bitcoin. Though lots of investors have expressed their opinions on the potential performance of Bitcoin in 2023, however, these are largely speculative as it is impossible to know for certain what the future holds. With this in mind, investors should always be aware of risks when investing in any asset, including Bitcoin, and should carefully consider their personal goals before investing.
Will Bitcoin Outperform Other Assets in 2023?
Historically, Bitcoin has been the top-performing asset when it comes to investment. Its strong volatility has made it the investors’ favorite. However, the case was different in 2022, with the price of Bitcoin losing more than 70% of its value compared to its all-time high created at $69,000 in the previous year. The tight monetary policies embarked upon this year have resulted in a lot of capital leaving the equity market, and Bitcoin has been the most affected. Other assets have managed to survive the strict monetary policies arising from the aggressive interest rate hike in 2022.
Notwithstanding, the low prices of Bitcoin in 2022 have given room for wider adoption of Bitcoin across the globe. Many investors who have missed the previous bull run have utilized this opportunity to acquire Bitcoin at lower prices.
Hence, with the increased adoption of Bitcoin recently, many now appear convinced that Bitcoin will likely outperform other assets in 2023. Is this possible for Bitcoin to do so?
Whether Bitcoin will perform better than other assets in 2023 will be dependent on the demand and supply in the coming year, which is always affected by the prevalent monetary policy embarked upon by the Fed during each quarter of the year. If the latter decides to slow down on their aggressive stance towards the monetary policy, then there are better chances for Bitcoin to perform better in 2023, given the larger adoption going on presently across the globe.
