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4 Bitcoin Predictions for 2023

Commentaries & Views

The beginning of 2023 has seen Bitcoin rally beyond expectations, making January its best month in years. But it is not only Bitcoin that has seen a rise: Ethereum is also up 32% in the last month. As we continue to see changes in the economic landscape as well as government policies, the cryptocurrency market is set for an extremely dynamic year. I consider there to be four key questions we must answer to anticipate if, and how Bitcoin will move in different directions with varying momentum as the year progresses.

1. What developments have been helping BTC climb higher in recent weeks?

One of the main reasons why we’re seeing a marked upturn in the cryptocurrency market is the cooling of inflation. The additional disposable income pocketed due to weakening inflationary headwinds has incentivized more people to make riskier investments. This has subsequently led to the age-old fear of missing out, as the Bitcoin price has been on a positive trajectory and everyone wants to be a part of the success. In the contemporary world of connectivity and communication, investors are increasingly influenced by trends and conversations seen online, which fuels the use and investment in already popular cryptocurrencies.

2. Is this merely a bull trap or the beginning of a sustained rally?

From experience, I wouldn’t go as far as to call this recent rise a bull-trap. But equally, I wouldn’t jump to call this the beginning of a bull market either. One of the reasons is that, despite the market looking promising, sentiment surrounding cryptocurrency worldwide has still for the most part been negative, and this is something I don’t envision will change until at least the second half of 2023.

From what we have seen so far this year, I’m confident enough to say we’re approaching the “top of the range” regarding Bitcoin market prices, and it’s likely this will ease back down to a more familiar range of $15,000 - $22,000.

3. Where do you see Bitcoin trading at by June? And by the end of 2023?

Looking further ahead in 2023 to the summer months and Q4, the US could be in a position where more money is printed, a situation we’re no strangers to. Interest and inflation rates will fall because of this which could be the perfect opportunity for Bitcoin to take on a genuine sustained rally to soar through towards the end of 2023. Before the FTX fallout, we were seeing prices in the range of $22,000 - $40,000, which is what we can anticipate seeing more of during the latter stages of this year.

4. Are there any developments or other unknowns that could derail the current momentum?

Although unlikely, stagflation could pose a risk of derailing the momentum of Bitcoin and other cryptocurrencies. Stagflation is an unfortunate combination of increasing inflation, rising unemployment and low economic growth. Evidently, if the source of capital for millions of traders around the world dries up, the market will see severe disruptions. Alongside stagflation, issues such as geopolitical upheaval and major economic changes, such as recession, can change the course of cryptocurrency pricing. These are hurdles that all markets, mainstream, traditional and decentralized disruptors, will feel the wrath of should they worsen over the course of 2023.

Overall, it is extremely encouraging to see such optimism in the cryptocurrency market, both from its own community and external observers, after a tumultuous end to 2022. Bitcoin’s impressive start in 2023, driven by factors such as dissipating inflation, has allowed customers to move their additional funds via means they believe in most to make up for the inflationary stall. But if there is anything the last 18 months have taught us about the financial markets, it’s to expect the unexpected, as volatility can be always around the corner.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.