Bitcoin Developments in 2023
In 2023, the trajectory of Bitcoin ETF remained a significant focal point, characterized by positive developments. Once again, Bitcoin outperformed traditional asset classes like stocks, bonds, and gold by a substantial margin, marking it as the best-performing asset class. The current price surge stands at over 150% since the year’s inception.
Institutional Interest and ETFs
This year experienced a remarkable surge in institutional interest, notably highlighted by BlackRock’s ETF application in June. Currently, there are around 12 open applications, with major financial players such as Invesco, ARK, Fidelity, VanEck, and Franklin Templeton in the mix. Although the SEC rejected GBTC’s application, a court invalidated the SEC’s reasoning, and even a mere rumor of approval in October triggered a significant upsurge in Bitcoin’s price.
Bitcoin’s Energy Consumption and Network Stability
The energy consumption for mining and securing Bitcoin also notably escalated, witnessing a 100% increase in the mining hashrate from 240 exahash to 482 exahash year-to-date. The hashrate measures the number of calculations per second required to add a new block of transactions to Bitcoin’s ledger approximately every ten minutes. This growth has solidified Bitcoin as the most secure and dependable digital system globally. Remarkably, the network maintained 100% uptime for the 14th consecutive year. Moreover, 2023 brought widespread acknowledgment of Bitcoin’s positive relationship with energy and the environment, contributing to electrical grid stabilization and offering economic incentives to mitigate carbon emissions.
Anticipated Events in 2024
Looking ahead to 2024, a significant event will be the anticipated “halving” when the new issuance of Bitcoin will halve at block 840,000, expected to be mined in late April. Despite increasing demand for Bitcoin, the supply added per block will decrease by 50%, marking the fourth halving in Bitcoin’s history. Historically, bull markets have followed halvings, presenting a high likelihood that Swan’s strategy will incorporate such an anticipation for a bull market in 2024 and 2025.
Potential Approvals of Spot Bitcoin ETFs
Furthermore, approval of one or more spot Bitcoin ETFs seems highly probable, potentially opening gates for capital currently invested in traditional channels. This approval is anticipated to materialize, most likely in January.
Technological Advancements
In the technological realm, Bitcoin witnessed continued impact from the Taproot upgrade, enhancing transaction efficiency and privacy. The maturation of the Lightning Network highlighted Bitcoin’s scalability by adding layers atop the Bitcoin protocol, enabling quicker and more cost-effective transactions. The Lightning infrastructure evolved significantly, facilitating approximately 200,000 transactions per day through various lightning-enabled wallets and on-demand Lightning nodes. Observing the more mature Lightning Network within another bull market’s sustained high-fee environment will be an interesting prospect.
Bitcoin’s Role Amidst Global Financial Uncertainty
Amidst global financial uncertainty, Bitcoin’s stability could attract attention from individuals, institutions, and governments aiming to alleviate chaos. It is gaining momentum, particularly against weak currencies, receiving support from global politicians, and finding increased usage among people and businesses worldwide. Bitcoin’s organic growth, devoid of central control and propelled by millions globally who recognize its advantages, safeguards global monetary integrity, emphasizing the importance of sound money as a fundamental human right.