After the endless winter of cryptocurrency that sowed dissatisfaction and despair among traders and investors, the gods of cryptocurrency seem to have smiled on the cryptocurrency community in 2023, restoring hope and optimism to the market. Bitcoin, the undisputed ruler of a new and controversial asset class, has seen a remarkable resurgence since the last bear market that many thought was impossible to achieve.
The flagship cryptocurrency has done what it does best. It is about rising from the ashes once again and demonstrating strength and resilience against all odds. The past year has not been without its obstacles. Rather, we have witnessed a number of incidents and events that have had huge ramifications in the cryptocurrency space and destabilized already unstable markets. However, the asset holds firm in its course, causing many traders and investors to buy bitcoin I hope you experience more gratitude in the coming year.
Does this mean it will be smooth sailing for Bitcoin from now on? exactly. There’s no denying that Bitcoin has had a pretty impressive rise over the past 12 months, but not everything has been roses and butterflies for the original cryptocurrency. As trading fees rise and rise, there are also reasons for concern, so investors should exercise caution and closely monitor market developments.
2023 will be the year of Bitcoin’s rebound
By the end of 2022, Bitcoin’s value had plummeted to $16,000. Without a point of reference, this may not seem like such a dire situation, but put it into context and compare this price to Bitcoin’s all-time high of $68,789 to get an idea of the scale of the decline. So it’s no exaggeration to say that Bitcoin is not entering 2023 in the best shape.
However, as the weeks and months passed, we saw Bitcoin gaining speed and gradually increasing in value. As expected, the journey was not linear and was marked by some setbacks and periods of stagnation as the asset faced several points of resistance along the way. Bitcoin has particularly struggled to surpass the $30,000 threshold, which it has reached several times but has been unable to maintain momentum.
Then, in the second half of October, Bitcoin showed tremendous strength and continued to rise from there. The coin surged past $30,000 and then rose past $35,000 and $37,000 on the 9th.Day In December, Bitcoin hit a yearly high of $44,180. Although the price has since fallen slightly and is currently sitting at $43,580, Bitcoin’s rise from $16,000 to $44,000 is still a huge achievement.
Most experts who have analyzed the potential factors contributing to this continued upward trend agree that Bitcoin’s rally has been fueled in part by excitement and anticipation resulting from the potential approval of the first Bitcoin ETF. Since last June, several major asset managers, including investment giant Blackrock, have filed applications with the U.S. Securities and Exchange Commission (SEC) to launch spot Bitcoin exchange-traded funds (ETFs).
Although the SEC has rejected all previous applications, many analysts believe the SEC will finally give approval this time around. Due to surging optimism, the price of Bitcoin has risen several times over the past few months. that much Spot Bitcoin ETF Approved It will be an important milestone in the history of Bitcoin and the cryptocurrency market as a whole, validating Bitcoin as a mainstream financial tool and strengthening the legitimacy of the digital asset.
Another aspect that is likely to affect Bitcoin’s trajectory is represented by a disruptive halving event. Bitcoin is known to experience price increases in the months leading up to each halving, and so far the pattern appears to have played out as expected.
Why are transaction fees increasing?
Bitcoin’s 2023 price increase was like a breath of fresh air after a disastrous 2022, but not all Bitcoin-related developments bring good news. One area of concern is rising transaction fees. Bitcoin fees have increased significantly over the past few months, reaching a yearly high of $37 on the 17th.Day december.
According to data from BitInfoCharts, at the time of this writing, the average fee per transaction is $31.61, significantly higher than the estimated global average daily earnings of $26. This is not the first time Bitcoin transaction fees have skyrocketed, but the fact that the trend continues to rise with no signs of abating makes the situation more worrying than before.
It is important to note that transaction fees are not linked in any way to the value of the funds being transferred. This is determined by data volume and block space demand. The more effort miners put into verifying blocks and confirming transactions, the more they are charged for their work.
Analysts point to the emergence of ordinal numbers as a potential explanation for this phenomenon. Ordinal is a digital asset linked to an individual Satoshi (SAT), the lowest unit of Bitcoin. So in some ways, they represent the equivalent of Bitcoin’s non-fungible tokens (NFTs).
The problem with Ordinals is that they take up block space due to monetary transfers. Therefore, transactions on the Bitcoin blockchain take longer and cost more to process. Cryptocurrency proponents have different opinions about Ordinals. While many highlight the benefits Bitcoin offers, such as fostering innovation and expanding the network’s use cases, others believe it undermines Bitcoin’s original purpose, which is to serve as a mechanism for conducting peer-to-peer transactions.
conclusion
Bitcoin has experienced notable growth in 2023, but its trajectory over the past year could be better described as a mixed bag. While we have seen cryptocurrency leaders surge and recover some of their losses, aspects such as high trading fees, lack of regulatory clarity, and persistent market volatility have cast a shadow of concern over the asset. This leads us to believe that 2024 may be a year of contrasts for Bitcoin and the cryptocurrency industry.