Crypto enthusiasts are entering 2023 with a renewed sense of optimism. As the cold winds of 2022’s crypto winter continue to blow, all is not lost and many are looking to 2023 for a change of season. Below we explore the various factors contributing to this change in attitude, from what the World Economic Forum believes is hindering Bitcoin’s adoption to price predictions and where crypto payments are headed.
World Economic Forum Backs Crypto
Once perceived as hurdles on cryptocurrency’s path to mainstream adoption, many now believe that regulations are the missing link. “Many” includes the World Economic Forum (WEF) which has called for “responsible regulation and sustained experimentation” within the crypto space to secure the future of cryptocurrencies in the global economy.
Following its annual meeting, the message became clear that cryptocurrencies align with the organization’s recent mission to correlate global spending with equality and sustainability. While the organization doesn’t hold any legislative authority, it does have a significant influence on the policymakers, business leaders, and politicians who do hold that power. The call for regulation in the space is likely to further propel efforts from governments around the world.
With more regulation in place, big firms and financial institutions are more likely to adopt digital currencies, thus aligning with the aims of the WEF. Dante Disparte, Chief Strategy Officer and Head of Global Policy at Circle, wisely stated “Watch what the big banks and mature financial services firms do, not what they say.”
Bitcoin Price Predictions
The range of price predictions for Bitcoin in 2023 is the largest to date, with many incorporating external factors such as inflation into their evaluation. Founder of Altana Digital Currency Fund, Alistair Milne, for example, is anticipating Bitcoin reaches $45,000 depending on the “damage done” by monetary policies.
Tim Draper, mentioned above, takes things much further and stated that he believes the price could reach $250,000 by mid-year. Both men cite the upcoming halving in 2024 as the major contributing factor.
Another bullish prediction is from Carol Alexander, the Professor of Finance at Sussex University, who said that the BTC price will reach $30,000 by Q3 2023, soaring to $50,000 by the end of Q4. Her prediction is backed by a previous one which said that the Bitcoin price would reach $10,000 in 2022, just a short distance from the truth.
Eric Wall, CIO of crypto hedge fund Arcane Assets, reiterated the $30,000 price prediction.
Of course, not everyone was so bullish.
Mark Mobius, the billionaire founder of Mobius Capital Partners, said that the Bitcoin price would drop below $10,000 in 2023, citing rising interest rates and the US Federal Reserve’s tightening monetary policy as prominent reasons. Mathew Sigel, head of digital assets research at VanEck Investments also predicted a $10-$12,000 price point for Bitcoin in Q1 2023.
Despite the price predictions mentioned above and collected from various Twitter threads, no one can argue with the facts. As witnessed from previous halving events, the price of Bitcoin has increased considerably in the months that follow the event.
For example, after the 2012 halving the price increased by 9,594% to reach its then-all-time high price in 2013; following the 2016 halving, the price increased by 3,012% the next year; and following the 2020 halving the price increased by 652% to reach the current all-time high price of $68,789.63.
According to the data, we are currently 65% of the way through the current Bitcoin halving cycle, with the next one scheduled for March 2024. Historically, this time frame indicates that the macro bottom of each cycle had been reached.
Bitcoin Payment Sector
One sector that flourished in 2022 was crypto payments. Despite the market prices, cryptocurrency payments were on the rise, with a 16% increase from average monthly crypto transactions in 2021 to 2022.
This is likely to continue growing as more merchants start incorporating cryptocurrencies into their payment options. Data shows that merchants accepting Bitcoin and other cryptocurrencies have seen a 327% return on investment (ROI) and can cut transaction costs by 70%.
According to venture capital investor, Tim Draper, the integration of cryptocurrencies into retail is far from realized. He believes the market, in which 80% of spending is conducted by women, is yet to be tapped into. According to Blockworks, only 26% of cryptocurrency holders are female, leaving much room for growth according to Draper’s theory.
Where Are We Headed in 2023?
Despite being bullish or bearish about the Bitcoin price, everyone can agree that crypto integration into the greater financial landscape is being realized. With more pressure on government bodies to build regulatory frameworks and increased support from organizations like the IMF and the WEF, more regulation will result in more adoption.
2023 could be an incredible year for the markets if the price predictions above are to be realized, but even more likely is an extraordinary expansion of the crypto payments sector.
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