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By Aaron Rafferty, CEO — StandardDAO
After a period of decline in 2022, which left many wondering whether the reign of cryptocurrency had come to an end, 2023 has seen Bitcoin recover significantly — even exceeding the threshold of $30,000 at one point. Some have begun to wonder whether Bitcoin could reach its previous height of $40,000 this year, and the future outlook may be brighter than it seems.
Although the crypto market has seen tremendous growth over the past 3 or so years, this growth has largely stagnated since 2022. Unfortunately, the fraudulent dealings of some higher-profile names in the crypto industry — such as FTX — have led the public to begin to question the validity and security of cryptocurrency as a financial solution. Ultimately, for crypto to overcome its next inflection point, it will take additional regulatory clarity, as well as an undeniable value proposition that appeals to the masses.
Why Bitcoin seems poised to grow
One factor that could play a key role in the continued growth of the crypto market is widespread institutional adoption. Large institutions such as KKR, Blackrock, and JPM are adopting crypto technology in a way that leaves the door open for (and encourages) other innovators to follow suit. As this institutional adoption occurs, these companies invest more money in developing crypto technology and infrastructure, thereby improving the system’s capabilities for all users.
These technology upgrades will make the network much more efficient, enabling faster and more seamless transactions on the blockchain. Additionally, more and more technological pioneers are beginning to change the way the Bitcoin blockchain works. For example, the development teams behind the Bored Apes NFT collection on Ethereum are now working on NFTs on the Bitcoin blockchain. The hope is that this could inspire a surge in Bitcoin in summer 2023, much as Ethereum jumped from $40 to $4500 in 2020 and 2021.
The halving effect also seems to imply a bright future for Bitcoin. Since the reward for mining Bitcoin is cut in half every so often, the rate at which new chains are being created will be slowed down in the future and the new supply will be limited. The mining rate will drop significantly in the next four years, which is a historical indicator of an upcoming price increase.
It is also essential to consider the various geopolitical factors that will come into play regarding the potential success of Bitcoin. Circumstances such as banking crises, war, and more are pushing more people towards cryptocurrencies as a “safe haven” of sorts against the instability of traditional fiat currency. The result is a generally bullish outlook for Bitcoin.
What may hold Bitcoin back?
That being said, the regulatory uncertainty of the crypto market could hold Bitcoin back from reaching the heights it otherwise could. In the wake of fraud and bankruptcies from companies like FTX, Luna, and SVB, which are still in the public’s minds, agencies like the SEC and CFTC are launching more stringent enforcement actions.
At the same time, some states like New York are passing laws restricting Bitcoin mining because of its environmental impact. This increased regulation could significantly strain the development of Bitcoin and other cryptocurrencies.
Another factor that some may not consider is competition in the crypto market. Ethereum is quickly gaining steam, especially after the upgrade brought about by the Ethereum Merge. Now, users are left wondering whether Bitcoin or Ethereum will offer the most benefits in terms of speed, scalability, security, and cost.
Although the immediate future of cryptocurrency prices is hard to predict because of their volatility, the long-term outlook of assets like Bitcoin is looking up. As the underlying technology of Bitcoin continues to develop and expand and more use cases are introduced, many remain bullish on the prospects of the cryptocurrency.
Author Bio
— Aaron Rafferty is the CEO of StandardDAO and Co-Founder of BattlePACs, a subsidiary of Standard DAO. Aaron unlocks value for individuals, institutions, and companies leveraging technologies like Blockchain, AI, cloud, and social media. Aaron's main focus is to build products that enhance engagement and productivity for college students.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.