Bitcoin neared $45,000 this year for a year-end increase of 154%. A sharp contrast from 2022’s decline in price, institutional adoption and monetary policy pushed the coin’s price up. (Photo illustration by Chesnot/Getty Images)
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The year 2023 came in like a lion and is going out like a lamb for bitcoin. Despite sniping from U.S. regulators, arrests, prosecutions and convictions of former industry superstars, and a lack of clarity of the legality of the cryptocurrency business, bitcoin has surged 154% from the dark days at the end of 2022.
Much of the renewed optimism can be attributed to the growing consensus that the U.S. will abandon its opposition to exchange-traded funds based on the spot bitcoin price, creating billions of dollars of demand for the asset from investors who want the assurance that their holdings are legal and those who prefer not to deal with the complications of digital wallets. Added to that is the programmed slowdown in the supply of new bitcoin expected by the middle of next year.
The token’s rebound led the entire market to a 110% gain for the year, bringing its value to $1.73 trillion, and the faster rise in bitcoin means that it now accounts for half of crypto assets, up from 38% at the end of 2022, according to CoinGecko. That’s still down from $3 trillion at the record high in November 2021, when bitcoin fetched $61,500.
The graph below charts bitcoin’s recovery and points out key events that powered its surge.
January 14. Whales Dive In: The year began with a bitcoin price rally as purchases by big investors and an increase in mining difficulty pushed bitcoin to above $21,000 for the first time since early November.
March 9-13. Flight to Safety: The collapses of Silvergate Capital
SI
BTC
VB
April 20. Coinbase
COIN
June 16, BlackRock
BLK
July 14. Ripple Court Win: After a two-year legal battle, a federal court rules in favor of Ripple Labs in the SEC’s case against the payments company, arguing that in some instances, the xrp token was not a security
October 13. Grayscale ETF Advances: The SEC fails to appeal a federal judge’s ruling that the agency must review Grayscale’s application to convert its Bitcoin Trust into an ETF.
November 7. SBF Convicted: Mere days after FTX founder and former CEO Sam Bankman-Fried was found guilty on seven counts of fraud and conspiracy in November, bitcoin rose to $37,300. “The market is decoupling [bitcoin] price movement from the actions of bad actors,” says Groth.
November 21. CZ Steps Down: Changpeng Zhao, stepped down from the helm of Binance, the largest crypto exchange in the world, as part of a $4 billion settlement with the U.S. Department of Justice.
December 6. Rate Cut, ETF Optimism Bitcoin surpasses $40,000 for the first time since April 2022 as investors anticipate lower interest rates and approval of spot ETFs in 2024.
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