The price of Bitcoin is up by almost a third since the start of 2023, leading experts to speculate that the prolonged ‘crypto winter’ is finally showing signs of thawing. It has also led to the banking giant Goldman Sachs ranking Bitcoin as the best-performing asset in the world this year.
The digital asset has been marching steadily higher since the start of 2023, recently breaking out beyond the $16,500 to $17,000 trading range that has been the dominant for over a month. At the time of writing, the price of Bitcoin was trading above $22,900, pushing its market cap higher than $400 billion for the first time since November. These latest gains have come amid easing inflation and signs that the US Federal Reserves will begin to slow interest rates over the coming months.
2022 was a turbulent year for crypto currency, with Bitcoin being one of many virtual currencies to crash amid several crises, bankruptcies and market turmoil. The implosion of FTX, once the world’s third-largest cryptocurrency exchange, is thought to be the catalyst for this massive comedown, with the company going bankrupt and leading to the co-founder, Sam Bankman-Fried, facing some serious fraud charges. A lack of regulation and accountability shook investor’s confidence in the digital currencies and tokens, and the market therefore plummeted.
Many people felt the effects of this crash, from those who used it for trading and investment to those who used it for purchasing goods and services. Many industries have jumped on the crypto bandwagon as the years have gone on. Online casino databases, such as Vegas Expert, who review and rate online casinos, have seen more and more operators add Bitcoin as a form of payment, and many big retailers have also started to accept the virtual currency. The impacts of this crash certainly rippled through the masses.
While the collapse of Bankman-Fried’s crypto empire still continues to hang over the market and the long-term impact on trading may linger for longer, risk-hungry investors haven’t been knocked off their stools when they look at the performance of Bitcoin over the last decade. Despite dropping in price by 60% last year, Bitcoin has still managed to rise in value by over 162,000% over the past decade to the end of 2022. If this is looked at in cash terms, a $1000 investment held on Bitcoin from the start of 2012 would have been worth just over $1.6 million at the end of last year.
So even though the crypto currency plunged by nearly two thirds last year, the 10-year return on Bitcoin to the end of last year was still far greater than the next best-performing investment. According to the year-to-date asset return report, carried out by Goldman Sachs, Bitcoin has performed better than the likes of S&P 500, gold, real estate and Nasdaq 100 this year. It also out-performed MSCI emerging markets index, MSCI developed markets, energy, information technology, financials, healthcare, utilities, materials, crude oil and many more.
While this turnaround in fortunes is good news for Bitcoin, the global currency market still remains a far way off its peak of almost $3 trillion back in November 2021. The digital currency is also still seeing mini flash crashes, which demonstrates that the recovery is still in the fragile stages. However, the recent report by Goldman Sachs naming Bitcoin as the best performing asset of 2023 shows that people’s confidence in the virtual currency remains relatively high. If favorable market conditions continue, perhaps Bitcoin will begin to recapture some of its losses as the year goes on.