Michael Byrne, analyst at financial consulting firm the Motley Fool, has announced the cryptocurrency that will perform well in 2023. Not surprisingly, this coin became Bitcoin (BTC). As it is known, BTC is the oldest and largest cryptocurrency. The analyst pointed out that he will buy Bitcoin early in the new year. Here are the details…
Which direction will the biggest cryptocurrency go in 2023?
In a note titled “financial market surprises of 2023,” Standard Chartered predicted that the price of Bitcoin will drop another 70 percent in the new year to $5,000 due to rising interest rates and continued sales. On the other hand, venture capitalist and early Bitcoin advocate Tim Draper, who is also one of the early investors of Baidu and Tesla, recently predicted that Bitcoin will reach $250,000 by mid-2023.
There’s a huge gap between these two numbers, but that’s what creates a market, especially for a volatile asset like Bitcoin. The real outcome will likely be somewhere in between, according to analyst Michael Byrne. However, the expert says, “I think Bitcoin will outperform in 2023 and beyond than it did in 2022.”
Trouble with centralized exchanges reveals the value of Bitcoin
As we reported on Kriptokoin.com, in 2022 Terra, Celsius Network, BlockFi and finally FTX collapsed. This has dealt a heavy blow to the credibility of the crypto industry. These events shook investor confidence and intensified Bitcoin selling. But if you take a step back, you’ll find that these events really highlight the value of a truly decentralized and trustless asset like Bitcoin.
For example, customers using a centralized crypto exchange like FTX or BlockFi have essentially decided to trust that exchange. But the general public has little knowledge of how these exchanges or protocols work. This makes it difficult for users to make a fully informed decision. Such platforms differ from banks in that they are not FDIC insured. And unlike traditional brokerages, there is little regulatory oversight that governs their behavior.
Truly reliable and decentralized cryptocurrency: BTC
The desire for a financial system that did not rely on banks or regulators was an important catalyst for the birth of Bitcoin. Indeed, to date, much of Bitcoin’s appeal lies in the fact that it is reliable, open-source, and decentralized. The transparent nature of Bitcoin’s distributed ledger technology means that anyone in the world can investigate or verify any transaction on the Blockchain. Users who buy Bitcoin and then store it in their own wallet or hardware ledger need not worry about losing access to their Bitcoin.
Centralized entities like FTX got into trouble by taking too much leverage. However, Bitcoin has no central authority to make even a bad decision that could endanger the network. The network is controlled by a decentralized miner group that validates transaction blocks all over the world. These are secured. Unlike some other high-profile cryptocurrencies, the Bitcoin network experienced no downtime in 2022. It remained the leading example of a secure blockchain network with zero hacks or downtime in a year where hacks plagued quite a few cryptocurrencies. You don’t need to trust anyone to use Bitcoin. This was a big part of its appeal in the beginning and it still is today.
Bitcoin gains momentum among financial giants
Bitcoin adoption is growing at a steady and remarkable rate. For example, Alphabet recently announced that it will accept Bitcoin payments for its Google Cloud service from 2023. Traditional financial institutions are also increasing their support for Bitcoin holders. Bank of New York Mellon, America’s oldest bank and the world’s largest custodian, will now allow its customers to hold and transfer Bitcoin using the Digital Asset Custody platform.
Bank of New York Mellon found that 91% of institutional investors are interested in investing in “tokenized products” and 41% already own cryptocurrencies. Mastercard is working with Paxos to enable traditional banks to offer cryptocurrency trading.
The biggest cryptocurrency is a hedge against hyperinflation
In countries like Argentina, where inflation has been rampant for years, many people seeking to mitigate the effects of devaluation use Bitcoin as a store of value and a medium of exchange. Governments continue to print more and more local currencies. This lowers the value of local currencies. But Bitcoin’s limited supply of 21 million means users don’t have to worry about a centralized structure eroding the value of the tokens by issuing more coins.
It must be admitted that Bitcoin has dropped 65% to date, this could invalidate its status as an inflation hedge. However, inflation in Argentina has approached 90 percent this year. Despite Bitcoin’s disappointing performance this year, that’s not the case for those in hyperinflationary countries. These people think that BTC is more promising than local currencies.
One could argue that it would be better for people in countries suffering from severe inflation to buy US dollars or euros. But many governments around the world have imposed currency restrictions and high exchange rates, making it increasingly difficult for citizens to buy foreign currency. Bitcoin has had a tough time in 2022, but it continues to offer the appeal it has always had, as a trusted, decentralized financial asset powering a truly global network of users.
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