Let’s talk about Bitcoin’s 2023.
Because boy, 2023 was a YEAR for Bitcoin.
Let’s kick things off with a chart of Bitcoin’s price over the last 12 months.
While 2022 was a horrendous year for Bitcoin’s price (dropped from low 40k to below 17k), 2023 has been a completely different story.
The infamous digital currency is up 70%+ over the last 12 months.
So, why the soar? What gave Bitcoin its wings in 2023?
Interest rates played a big role.
According to an article by CNBC, a key reason for Bitcoin’s price soar in 2023 was “an easing of the Federal Reserve’s interest rate hikes, which created a more attractive case for riskier assets.”
This makes sense. It’s known that when interest rates are high, people are less likely to make riskier investments. The opposite is also true. When interest rates are lower, people are more likely to make riskier investments.
A recent article from Bankrate reiterates this:
“In general, high interest rates scare investors away from riskier investments like crypto, and the lowering of rates will be seen as a positive by the crypto investor community.”
So, change in interest rates was likely a main driver in Bitcoin’s price increase in 2023.
In our next edition of this newsletter, we’ll take a look at the SEC’s recent approval of Bitcoin ETFs, which created a TON of buzz. Anticipation of the approval also led to a short-term surge in Bitcoin’s price, which we’ll also discuss.
And with that, see you next time. Thank you for reading. Let me know if you have any comments, ideas, questions, and so on. Let’s keep learning together.
Video for this article
#Bitcoin 's price soared in 2023. Here's one reason why. pic.twitter.com/liOFmABY7G
— Brad Lathrop (@BradLathrop) February 6, 2024
