A Comprehensive Outlook Of Bitcoin After 2022’s Rollercoaster

Bitcoin, the world’s largest cryptocurrency, has been making headlines lately as its price continues to rise and fall. However, there is more to the story than just the price fluctuations. In this article, we will take a deep dive into seven aspects that may impact Bitcoin’s future in 2023.

  1. Unique Bitcoin Addresses: A Growing Trend

The number of unique Bitcoin addresses holding at least 0.01, 0.1, and 1 bitcoin continues to grow, indicating a growing number of users buying and holding Bitcoin in self-custody. This growth in adoption is a promising sign for the cryptocurrency market.

  1. Long-Term Holder Supply: A Positive Sign

Long-term holder supply has increased to almost 14 million bitcoin, which is calculated using a threshold of a 155-day holding period. As of now, 72.49% of the bitcoin in circulation is not likely to be sold at current prices. This indicates that a large subset of Bitcoin investors are accumulating the digital asset no matter the price.

  1. Total Addressable Market: Bitcoin’s Potential

Bitcoin is currently in its store-of-value phase and is a better store of value for many reasons than other assets, such as real estate, gold, and equities. Should Bitcoin take even a 1% share from these other stores of value, the market cap would be $5.9 trillion, putting Bitcoin at over $300,000 per coin.

  1. Transfer Volume: A Growing Trend

The demand for transferring Bitcoin is increasing, with a clear upward trend in USD terms. In 2022, there was a change-adjusted transfer volume of over 556 million bitcoin settled on the Bitcoin network, up 102% from 2021. In USD terms, the Bitcoin network settled just shy of $15 trillion in value in 2022.

  1. Censorship Resistance: A Valuable Feature

Bitcoin’s censorship resistance is an extremely valuable feature as the world enters into a period of deglobalization. With a market capitalization of only $324 billion, we believe Bitcoin is severely undervalued.

  1. Rare Opportunity in Bitcoin’s Price

The Bitcoin realized market cap is down 18.8% from all-time highs, which is the second-largest drawdown in its history. Relative to its history, Bitcoin is at the phase of the cycle where it’s about as cheap as it gets. Its current market exchange rate is approximately 20% lower than its average cost basis on-chain, which has only happened at or near the local bottom of Bitcoin market cycles. This could be a rare buying opportunity for investors.

  1. Macroeconomic Environment: A Factor to Consider

As we move into 2023, it’s necessary to recognize the state of the geopolitical landscape because macro is the driving force behind economic growth. Readers should consider the reality that 2023 likely brings about Bitcoin’s first experience with a prolonged economic recession.

In conclusion, Bitcoin’s future looks promising as its adoption continues to grow and unique features such as censorship resistance and finitely scarce hard-cap limit set it apart from other assets. However, investors should also be aware of the potential impact of macroeconomic factors on the cryptocurrency market. As with any investment, it’s important to do your own research and assess your risk tolerance before making any decisions.