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How Did Bitcoin Experience a 160% Surge in 2023? Details of the Story!

  • In a stunning turnaround from the shadow of the 2022 decline, Bitcoin has seen a remarkable 160% increase in value this year, contributing over $530 billion to its market capitalization.
  • According to Bloomberg’s latest report, Michael Saylor, the co-founder of MicroStrategy Inc., sees this approval as a “significant catalyst.”
  • Consumer Price Index (CPI) and Producer Price Index (PPI) reports also indicated a easing of inflation in the U.S., increasing bets on Fed policy interest rate cuts in 2024.

As the end of 2023 approaches, COINOTAG examined the reasons behind the massive rise in BTC price: Here are the details!

Bitcoin Experienced a Massive Increase in 2023

Bitcoin-BTC

In a stunning turnaround from the shadow of the 2022 decline, Bitcoin has seen a remarkable 160% increase in value this year, contributing over $530 billion to its market capitalization. This unexpected rally not only revitalized the leading cryptocurrency but also reignited interest in the overall crypto market.

Significantly, this year has been a bullish one not only for Bitcoin but also for the entire crypto market, as more institutional investors showed interest in the market. Therefore, let’s take a look at the key events driving the rally in Bitcoin’s price and the overall market.

Amid ongoing skepticism and regulatory challenges, the cryptocurrency market experienced an extraordinary revival driven by optimism surrounding the potential approval of a Bitcoin Spot ETF by U.S. regulators. According to Bloomberg’s latest report, Michael Saylor, the co-founder of MicroStrategy Inc., sees this approval as a “significant catalyst” and believes it will pave the way for a new avenue for mainstream investors.

In his statement, Saylor emphasizes the importance of the approval of spot ETFs for Bitcoin, stating that it could act as a significant catalyst, creating a substantial increase in demand. Saylor’s optimism is based on the belief that the primary reason for the existing limitations is the lack of a robust and compatible investment channel for Bitcoin, especially one with high bandwidth.

Therefore, there is an expectation that the approval of spot ETFs will fill this void and potentially lead to an increase in demand for cryptocurrencies. Additionally, speculation about the Bitcoin halving event in 2024 has also heightened investor sensitivity.

Furthermore, the Federal Reserve’s dovish stance and the decline in inflation this year have created positive sentiment in the market. The latest report from the U.S. Department of Commerce revealed a 0.1% monthly increase and a 3.2% annual increase in the core PCE price index (excluding volatile food and energy prices). Meanwhile, PCE inflation showed a 1.9% increase on a six-month basis, indicating that the Federal Reserve is approaching its inflation target if current trends continue.

On the other hand, previous Consumer Price Index (CPI) and Producer Price Index (PPI) reports also indicated a easing of inflation in the U.S., increasing bets on Fed policy interest rate cuts in 2024.

Challenges Continue for BTC

The Bitcoin price registered a slight 0.24% decline in the last 24 hours and traded at $43,606.06 at the time of writing, with a 28.92% decrease in trading volume, falling to $17.38 billion. However, the crypto has added over 16% on a monthly basis and has shown a nearly 160% increase since the beginning of the year. Bitcoin’s market capitalization has also increased by over $500 billion throughout the year.

Despite ongoing success, the crypto market faces challenges. Events like the $4.3 billion fine imposed on Binance and legal issues experienced by industry figures like Sam Bankman-Fried have left lasting marks. Market depth, a measure of the ability to process large orders without a significant price impact, has also experienced a decline, posing a barrier to smooth trading.

However, Bitcoin derivatives saw increased activity in 2023, with both options and futures markets reaching record levels of open positions. This growing interest is reflected in the decentralized finance sector, where liquidity gain protocols have reached new highs, providing easier access to blockchain rewards.

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Celal Mutlu
Celal Mutluhttps://coinotag.com/
Celal Mutlu is a young Satoshi reflection at the age of 21. His favorite characters are CZ and Vitalik, and he has a great sense of humor. Celal is a keen follower of developments in the world of cryptocurrency and keeps up with the latest news and trends.
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