2023-12-07 04:36:37
The last few months have been especially busy for investment markets, including cryptographic assets. After a 2022 that brought down the increases of the previous year, Since 2023 began, Bitcoin has been pushing the cryptocurrency market to prices that have not been seen in almost two years. From the 16,500 dollars with which the year began, to the 44,400 dollars it marked two days ago, Bitcoin has appreciated by 170% and with this it has infected the rest of the cryptoasset market with optimism, whose aggregate capitalization has once again exceeded the 1.5 billion dollars.
The bullish rally it is experiencing is attributed to various positive expectations for the sectorsuch as the possible approval of the Bitcoin spot exchange-traded fund, which should be approved in early 2024, or the halving of the reigning cryptocurrency in the spring of next year, which will reduce the number of coins put into circulation by half.
Bitcoin, among the 10 assets with the highest global capitalization
The latest revaluation of Bitcoin has led it to sneak back into the top 10 of the assets with the highest market capitalization, currently occupying ninth position above companies such as Meta Platforms or Warren Buffett’s conglomerate. Berkshire Hathaway. Gold continues to lead this ranking with a capitalization of almost 14 trillion dollars, having recently reached a new record by exceeding $2,100 per ounce. Recent macroeconomic events have favored assets considered havens of value, generating a notable increase in their value. This, in turn, has attracted individual and institutional investors to Bitcoincontributing to his recent rise.
After gold, Apple is the second most capitalized asset in the world, with 3 trillion dollars. It heads the companies that make it into the ranking, dominated by technology companies such as Microsoft, Amazon or Alphabet, and also silver. To find the next crypto asset on the list, after Bitcoin, you have to go down to position number thirty-five, where Ethereum is located.
Crypto Market Resilient to Headwinds
In the last year, the world of cryptocurrencies has experienced a series of significant events that have marked a period of intense volatility and regulatory changes. One of the most notorious events was the collapse of FTX, considered the largest fraud in the recent history of the sector. This event shook confidence in the market and had a domino effect on several aspects.
In addition, there was the collapse of some regional banks, which exacerbated uncertainty in the financial sphere.. In parallel, the cryptocurrency market experienced a bear market that eliminated two trillion dollars in value, representing the largest decline in its history. This adverse environment was compounded by more than 500 lawsuits and regulatory cases, reflecting an increase in surveillance and enforcement in this sector.
The instability did not stop there. Several cryptocurrency lenders filed for bankruptcy, adding more pressure to an already troubled market. In a high-profile case, Binance, one of the largest cryptocurrency exchange platforms, was hit with a record $4.3 billion fine by US regulators, underscoring the growing regulatory focus on the industry.
Despite these challenges and turbulence, Bitcoin, the best-known cryptocurrency, has shown remarkable resilience. This year, it has seen an impressive 160% increase in value, recently reaching $43,000. This growth, amid such an adverse environment, highlights the incredible resilience of the cryptocurrency market and its ability to bounce back even in the most difficult circumstances.
Exchange-traded funds and the halving maintain a bullish view
Imminent approval of a series of Bitcoin-based exchange-traded funds is being widely recognized as one of the main drivers of the rally of the queen cryptocurrency, taking it to almost $45,000. In fact, this is a significant event, since, if these almost ten listed funds are approved by the large Wall Street firms, it is estimated that the potential capital injection would be between 10,000 and 12,000 million dollars.
Another key phenomenon that is increasingly reflected in the price of Bitcoin, and therefore in the rest of the market, is the halving del Bitcoin. This event implies that, every four years, the reward that miners obtain for validating transactions in the blockchain is reduced by half. While currently 6.25 Bitcoins are awarded every ten minutes to the winning computer, starting in April next year the reward will decrease to 3,125 Bitcoins. This phenomenon, which progressively reduces the rate of increase in Bitcoin supply while showing growing demand, results in a progressive price increase.
The great rises in the market, and specifically in Bitcoin, require maximum caution since a short-term price correction would be more than reasonable, and even more so in an asset with so much volatility. In any case, expectations for the medium and long term seem to have new arguments for optimism. So much so that, according to Bloomberg himself, “This is not just a passing peak and marks the beginning of a new ‘crypto supercycle’.”
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