Bitcoin has reached its highest value since the crypto crash recorded in June 2022 where it lost almost 65% of its market share. This is happening amidst ongoing turmoil across financial markets. Many attribute the rise in Bitcoin’s price to a strong case that takes us back to the basics of why the digital currency was created.
Bitcoin was created as a decentralised alternative to traditional banking in the aftermath of the 2008-2009 financial crisis. Its programmed monetary policy was designed to act as a hedge against inflation. Now, in 2022-2023, with banks failing and exchanges crumbling, some are reminded of the original ethos of Bitcoin as a global financial alternative and protection against the debasement of currencies.
The bio of a popular subreddit community reads: “Bitcoin is the currency of the internet: a distributed, worldwide, decentralized digital money. Unlike traditional currencies such as dollars, bitcoins are issued and managed without any central authority whatsoever. There is no government, company, or bank in charge of Bitcoin. As such, it is more resistant to wild inflation and corrupt banks. With Bitcoin, you can be your own bank.” These are the words that the 4,883,642 members of r/Bitcoin believe.
Is Bitcoin price set to hit new highs in 2023?
Bitcoin advocates are optimistic about the cryptocurrency’s potential as a “safe-haven investment” in a global banking crisis. They believe that Bitcoin can provide investors with a good opportunity to hedge or earn attractive returns during these times of uncertainty. Hence, it is no coincidence that the price of Bitcoin resumed its rally in the first quarter of 2023. According to Coin Market Cap, Bitcoin rose to over 30,000 USD shortly after the Easter Holidays on April 10th, 2023.
As the price of Bitcoin rises, it’s important to draw a parallel between the current bull run and the one that ended last year. In 2022, Bitcoin reached an all-time high of $69,000 due to the Fed’s release of $4.189 trillion in response to COVID in 2020. Currently, the Fed is in the process of helping out the depositors in two failed banks by releasing $300 billion into circulation to save the banking sector. This shall result in more inflation. Inflation creates a bubble in the market, and bubbles burst – eventually.
There are different factors suspected to be driving the current price action of Bitcoin. Some claim that regulators who’d previously been laser-focused on the crypto space, now have their attention on the banks and the traditional finance sector. Onyebuchi Ekejiuba, in conversation with us, said the particular rally is possibly happening because of the widespread speculation that the Feds will pause rate hiking by their next Federal Open Market Committee (FOMC) meeting. He commented that forward-looking enthusiasts like himself, are “anticipating a rally back to former highs before the next Bitcoin halving which is slated for April 2024, and new highs post-halving”.
What should Nigerian Investors do?
To protect their capital base, we suggest that investors avoid putting all their eggs in one basket. Diversification is key, and investors should consider investing in a variety of assets to spread their risk. This means investing smaller amounts at regular intervals and carefully monitoring price movements in relation to the global financial landscape.
Crypto traders and investors should conduct extensive research on the fundamentals and technical aspects of an asset before making buy or sell decisions. While paying attention to speculations from other investors worldwide is important, as these can often drive the price of Bitcoin, they must be cautious not to rely solely on speculation. It’s important to be mindful of both the potential for a looming bull run and the possibility of a recession. Nevertheless, there are still opportunities to profit in the current market.
Trade Bitcoin and other cryptocurrencies on OctaFX. Learn all you can with free educational content. Be knowledgeable and proactive to make profits as prices move.
OctaFX is an international broker that has been providing online trading services worldwide since 2011. It offers commission-free access to financial markets and a variety of services already utilised by clients from 180 countries with more than 21 million trading accounts. Free educational webinars, articles, and analytical tools they provide help clients reach their investment goals.
The company is involved in a comprehensive network of charitable and humanitarian initiatives, including the improvement of educational infrastructure and short-notice relief projects supporting local communities.
OctaFX has also won more than 60 awards since its foundation, including the ‘Best Online Broker Global 2022’ award from World Business Outlook and the ‘Best Global Broker Asia 2022’ award from International Business Magazine.
