Bitcoin (BTC) price fluctuations are always a hot topic, but we heard a lot of good news in 2023. Bitcoin is once again the best-performing asset class, beating stocks, bonds, and gold by a wide margin. At the time of writing, prices have increased more than 150% since the beginning of the year.

2023 will see a significant increase in interest from institutional investors, with BlackRock attracting attention in June when it applied for an exchange-traded fund (ETF). Currently, 12 ETFs are pending, including Invesco, ARK, Fidelity, VanEck, and Franklin Templeton. The Securities and Exchange Commission (SEC) denied Grayscale’s application, but a court ruled that the SEC’s denial was invalid. In October, the mere rumor of approval sent Bitcoin’s price skyrocketing.

The energy used for Bitcoin mining and security has also increased significantly, with hashrate increasing by 100% from 240 exahashes per second (EH/s) to 482 exahashes per second (EH/s). Hashrate is a measure of how many calculations per second are required to add another block of transactions to the Bitcoin ledger, on average once every 10 minutes. Bitcoin continues to emerge as the world’s most secure and reliable digital system. Network uptime was 100% for 14 consecutive years. In 2023, there will be further recognition that Bitcoin’s relationship with energy and the environment is overwhelmingly positive, contributing to grid stabilization and creating economic incentives to reduce carbon emissions. .

One thing that is certain to happen in 2024 is the next “halving”. New Bitcoin issuance will be cut in half with 840,000 blocks scheduled to be mined in late April. Even though the demand for Bitcoin is increasing, the supply added with each block decreases by 50%. This is the fourth halving in Bitcoin’s history, and halvings have historically been followed by bull markets. Whether it’s causation or an anomaly, it’s true until it doesn’t, and at Swan, we have a strategy that incorporates the likely bull market in 2024 and 2025. .

It is also almost certain that one or more spot Bitcoin ETFs will be approved. This will open the floodgates for capital in traditional investment channels. The consensus is that this is most likely to happen in January.

Bitcoin technology trends for 2023 include the continued impact of Taproot upgrades, enhanced transaction efficiency and privacy. The maturation of the Lightning Network has highlighted Bitcoin’s scalable ability to facilitate faster and more economical transactions by adding layers on top of the Bitcoin protocol. The Lightning infrastructure is making great strides, with a large number of Lightning-enabled wallets, on-demand Lightning nodes, and facilitating an estimated 200,000 transactions per day. It will be interesting to see how the more mature Lightning Network will perform in a high-fee environment where the bull market continues once again.

In 2024, amid global financial uncertainty, Bitcoin’s stability may attract attention from individuals, institutional investors, and governments seeking to reduce disruption. Bitcoin has achieved record values ​​against weaker currencies, gained support from world politicians, and is being increasingly used by people and businesses around the world. Bitcoin’s growth is organic, with no central control, and driven by millions of people around the world who recognize its benefits. Bitcoin protects the integrity of the world’s money, and sound money is a basic human right.

｜Translation: CoinDesk JAPAN
｜Edited by: Toshihiko Inoue
｜Image: Shutterstock
｜Original text: ETFs, Halving, Upgrades – What to Expect With Bitcoin Next Year