Crypto winter just may be the time to buy BTC.
It’s the dead of winter. It’s cold. Minimal daylight. Wallets are light after the holiday season. But that is simply the northern perspective. In Australia, light shines long, and it’s a toasty 25 degrees in Brisbane.
When it comes to the world’s leading cryptocurrency, it may be time to flip your perspective.
In the following article, I’ll lay out reasons to be bullish on Bitcoin in 2023.
BITCOIN IS HOLDING STRONG
Consider everything that’s happened since Bitcoin’s peak of $69,000 in November 2021: the invasion of Ukraine, brutal interest rate hikes, and crippling inflation.
On top of that, crypto has been beset with scandal: the collapses of Terra/Luna, FTX, and Genesis.
While Bitcoin and the rest of the crypto market saw bloodshed in 2022, Bitcoin is holding strong. While its price has rallied well, the price of bitcoin is only one indicator of its strength. Hash rate, illiquid supply, and non-zero addresses are also important indicators.
If you look at BTC’s hash rate alone (its ability to mine new blocks) and compare it to its price, it looks strong. As for its supply, 80% of it is now in cold storage.
While there does appear to be a confluence of factors indicating a bear market bottom, I don’t think the bottom is in just yet.
But smart money does…
SMART MONEY IS BUYING BITCOIN
While the crypto winter has retail buyers, otherwise known as the ‘dumb money’ running scared, ‘smart money’ is devouring Bitcoin.
Institutions are buying the dip — 85% of BTC buys are coming from the USA, despite a hawkish sentiment from D.C. after the FTX fiasco.
Bitcoin futures on the Chicago Mercantile Exchange are also going for a premium for the first time since the Sam Bankman-Fried unraveling. It’s worth noting that this only applies to shorter term sales contracts, while longer term futures are still in backwardation.
Nonetheless, a reversal of the CME basis is still a bullish signal. In addition, Deutsche Digital Assets has noted that there is an uptick in Coinbase Premium sales, indicating smart money investment.
BITCOIN IS BETTER THAN GOLD
Goldman Sachs recently declared Bitcoin the best-performing asset, beating out gold, the Nasdaq 100, and the energy sector.
BTC has given investors a return of 27% since January 1. Of course, this Goldman Sachs declaration is simply a year-to-date metric, but its lead ahead of the pack speaks for itself.
So, for a store of value in weak economic times, BTC as digital gold could be a safe bet, even more so than actual gold. Although you may not need to choose.
According to an analyst on Twitter, the correlation between Bitcoin and gold is now 100%. With gold’s value surging against the DXY (U.S. dollar index), it seems BTC is following suit.
If Bitcoin follows in gold’s footsteps, the digital gold could be on the path to breaking $50,000.
CRYPTO WINTER IS AN OPPORTUNITY
Winter is for stockpiling. While some may use the season to hibernate, those that thrive use it as an opportunity to add to their reserves. It’s the same for investing.
It is hard to know where we are in crypto winter. Is spring around the corner, or is the groundhog staying underground?
In simple mathematical terms, we are up 40% on the year, but we still need 176% in upside to match our 2021 peak.
We still have a long way to go. Nonetheless, Bitcoin is the most exciting tech opportunity since being an early investor in Apple (APPL), Google (GOOG), and NVIDIA (NVDA).
BITCOIN BOTTOM LINE
Trustless, cross-border, decentralized payments are the way of the future. Bitcoin is the dominant market force and has the first-to-market advantage. It’s still king.
Bury the hatches, it’s going to be a bumpy ride, but the pot of gold is on the other side.
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The Case for Bitcoin in 2023 was originally published in The Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.
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