The most important cryptocurrency story in 2023 was not the cohort of Wall Street players like BlackRock, FIdelity, VanEck, and others applying for SEC approval to offer a Bitcoin spot ETF, which would track the market price.
It wasn’t Bitcoin Ordinals, digital assets inscribed onto a satoshi, breathing life into a hibernating NFT phenomenon and causing controversy in the Bitcoin industry.
It wasn’t Silvergate Capital winding down operations. Nor Signature Bank being shut down by regulations. Not even Silicon Valley Bank (SVB) going bankrupt.
Rather, the biggest cryptocurrency story was the Bitcoin price itself.
Bitcoin rose from more than $5,000 during the onset of the pandemic to nearly $68,000 in November 2021, which stands as Bitcoin’s record high price. Until the start of 2023, the Federal Reserve’s series of rate hikes had dampened Bitcoin’s price action. Throughout 2022, the asset endured a bear market, falling more than 65% as higher Federal Reserve rates hurt the entire crypto market. Major hedge funds and crypto lenders went out of business, and FTX went out of business.
On January 1, 2023, Bitcoin opened the year at approximately $16,620. That same month, it reached $21,000, matching its price on the day FTX began its demise into bankruptcy. As that unfolded, on November 7 and November 8 2022, Bitcoin declined in price by 22% in less than a day.
By February 2023, Bitcoin already had more than 70% gains, easily setting the pace ahead of all other major assets. Bitcoin had reportedly caught a bid among retail investors and whales alike.
On June 21, Bitcoin rallied on the news that BlackRock planned to launch a Bitcoin exchange-traded fund (ETF). The Wall Street Journal reported that same week that EDX Markets (Citadel Securities), Fidelity, and Schwab had started to explore a Bitcoin ETF, too.
Bitcoin then soared to almost $35,000–the digital gold’s highest point in nearly 18 months. That was more than double the price seen at the beginning of 2023. On December 4, Bitcoin surpassed $42,000, reaching a 20-month high thanks to U.S. interest rate cut expectations and expectation of an exchange-traded spot bitcoin fund approval.
Bitcoin had more than two-and-a-half times its New Year’s Day price by early December. At the time of writing, Bitcoin’s price was $43,713. Outpacing most, if not all, major assets on the year. Gold, for instance, started the year at $1,823 and is $2,007 at the time of writing.
What might we expect from the Bitcoin price in 2024?
Bitcoin’s impressive 2023 comes just ahead of the fourth Bitcoin halving, due to take place April 18, 2023. It will cut Bitcoin’s block reward from 6.25 bitcoins to 3.125. This is expected to decrease the supply and is often associated with price increases in the months after these events. Indeed, in the month following the past three halvings, the Bitcoin price has reliably increased in price.
Additionally, optimism over a SEC Bitcoin ETF approval is sure to continue driving price. A Bitcoin ETF would make it easier for the general public to gain exposure to Bitcoin, thus creating a larger pool of Bitcoin investors.
In line with this, in April 2023, Standard Chartered’s head of digital assets research Geoff Kendrick forecasted that Bitcoin could reach $100,000 by the end of 2024, as it declared the “crypto winter” over. The reasoning? Banking sector turmoil and a stabilization of risk assets as the U.S. Federal Reserve ends its rate-hiking cycle.
“While sources of uncertainty remain, we think the pathway to the USD 100,000 level is becoming clearer,” Kendrick wrote.
Kendrick then updated his prediction, suggesting Bitcoin could reach $50,000 this year and $120,000 by the end of 2024, arguing that a jump in the price of Bitcoin would “encourage bitcoin miners to hoard more of the supply.” Bitcoin’s price action, therefore, could be crypto’s big 2024 story, too.
Kadan Stadelmann
Kadan Stadelmann is a blockchain developer, operations security expert and Komodo Platform’s chief technology officer. His experience ranges from working in operations security in the government sector and launching technology startups to application development and cryptography. Kadan started his journey into blockchain technology in 2011 and joined the Komodo team in 2016.
