With the first month of 2023 already in the books, it’s a perfect time to look at what the new year holds for bitcoin.
As of this writing, it appears that bitcoin is going to be just fine in 2023. It’s already up +37% for the month, beating out the Nasdaq which is down -3.9%. The real question going forward is what’s in store for longterm holders of bitcoin and those sitting on the sidelines,
waiting to make the leap. Instead of seeing a sustainable rally this past Fall, which I fully expected, we got slammed with the FTX debacle. That turned out to be a blessing in disguise in many ways:
We smaller buyers and holders were able to stack more bitcoin with a dollar cost averaging strategy, way more than ever imagined.
We all learned a very valuable lesson about the importance of self custody of the majority of our bitcoin holdings.
Everyone is beginning to wake up to the huge difference between bitcoin and crypto and especially fraudsters. If it looks too good to be true, it probably is.
Consolidation and a healthy cleanse is so refreshing and good for the BTC market.
Looking ahead, this year‘s Super Bowl will not have nearly as many crypto ads as last year’s, especially starring Larry David.
Never fear, within the next 18 months we will see new all time highs.
The question is not if we will see another bull market, but when it will take place. I strongly agree with this post Bitcoin: The Last Cycle. This will be the last opportunity for smaller investors and savers, such as myself, to own one or more bitcoins. By the time the next bull run is over, we’ll be thinking of accumulating Satoshi's (100,000,00 of a bitcoin) because BTC will be so high. Bitcoin will still have some price swings, but not nearly as pronounced as last year. I foresee a slow, steady ramp in value.
Why? Because until now, for large institutions and investors, holding large amounts of bitcoin (think billions) has been a bridge too far, due to trust and security issues around self custody.
That will all rapidly change over the next 18 months because new protocols have been implemented, and are being proposed that will make it much easier and secure for investors and large institutions–including potentially central banks–to have custody and self governance over their bitcoin.
One game changer is Mini Script which allows you to set rules on bitcoin custody that change over time. For example, would you want to leave some bitcoin to your kids in 10 years when they’re old enough to appreciate it? Mini script enables you to do that much easier. What about a large institution's ability to lock out board directors as co-key signatures once their term time has expired? Mini Script facilitates that as well.
There is even a protocol proposed that will allow your XYZ corporation to send bitcoin to an escrow wallet for a period of time before deposit in the final wallet destination. That means that even if a hacker somehow got a hold of your private keys, you can set alarms to notify you or your IT person of the breach and claw it back from the escrow wallet. For risk mitigation and insurance purposes, these new protocols are game changers, making it much easier with less friction to hold billions of bitcoin on corporate books.
What’s more, in March, 2024, the supply of new bitcoin being mined will be cut in half from 900 a day to 450 a day. I believe that following this event, bitcoin will act much more like a newly minted IPO tech stock, hitting new meteoric heights. This should also drive investment by institutions, family offices and even possibly central banks to secure a stake in bitcoin.
All these factors will still take time to be implemented, then tested and ultimately adopted. Meanwhile, we may continue to enjoy cheap bitcoin in the near future. However, as the year progresses, we’ll certainly see more adoption and accumulation from investors, large and small, before the 2024 Super Bowl. I predict a high probability of at least one company advertisement related directly to bitcoin.
All the best,
Jim