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Seven Factors Bitcoin Investors Should Watch in 2023

Author: Rea Setia
by Rea Setia
Posted: Mar 18, 2023

Cryptocurrencies have a very volatile nature, which is why people are inclined to invest in them. Talking about cryptocurrencies, no one can miss naming Bitcoin, which has raised immensely over time. Bitcoin aims to become the world’s reserve currency, giving an investment opportunity to investors across the world. Here, we have come up with seven noticeable factors to which we recommend Bitcoin investors pay attention in the coming months of 2023.

Seven Factors that Bitcoin Investors Should Look at in 2023
  • Convicted Bitcoin Investors

Considering investor conviction as a factor, the number of unique bitcoin addresses holding at least 0.01, 0.1, and 1 bitcoin This report shows that more and more users are showing interest in bitcoin investment and holding their share. Also, it shows the rise in the adoption of Bitcoin with a growing number of unique addresses.

Another metric to be considered is the amount held by long-term holders. It has increased to 14 million bitcoins. There is a high chance of growth in bitcoin as there is a growing number of unique addresses, and a large number of them are long-term investors.

  • Total Addressable Market

During monetization, a currency has to go through three phases. Store of value, medium of exchange, and unit of account. And bitcoin is in the store-of-value phase because it is more liquid, easier to access, secure, and scarce than any other asset. It has a hard-cap limit of 21 million coins. Bitcoin has covered a small fraction of global wealth.

If Bitcoin took even a 1% share of global stores of value, the total market cap would reach $5.9 trillion, and that makes the bitcoin value $300,000 per coin. As per these numbers, we think that the inclination towards bitcoin adoption will rise gradually, and then it will be adopted by all.

  • Transfer Volume

Looking at the Bitcoin network, the amount of value clearly shows an upward trend in USD terms along with increased demand for transferring Bitcoin. The Bitcoin Censorship resistance feature that gives the user freedom to transact is an extremely valuable feature as the world enters the phase of deglobalization. Also, it should be noted that, despite falling in price, the Bitcoin network transferred a huge amount of value in USD terms.

  • Rare Opportunity In Bitcoin’s Price

The Bitcoin realized market cap is down 18.8% from an all-time high, which is itself the second-largest drawdown in history. If we keep macroeconomics as a factor, this is a rare buying opportunity. Also, it would be a wise decision to buy bitcoins in these times as there would be a great chance of a higher return in the long term.

  • Macroeconomics Environment

Behind macroeconomic growth, the geopolitical landscape works as a driving force, so it is important to recognise this. Talking about last year's central bank policy, people around the world have faced monetary policy implications.

As the bond yields remained at a high level, the asset valuation that is dependent upon cash flow has declined. However, Bitcoin's valuation does not depend on cash flow, but it will be affected by the revaluation of global yields.

  • Bitcoin Mining and Infrastructure

As per the Bitcoin miners, they experience faster growth than ever by deploying machines and investing in wide infrastructure. With the increase in the hash rate, the Bitcoin price decreased, and the miners face a decrease in revenue after the tremendous rise in 2021.

The public miner stock valuation fell more than the Bitcoin price, and during all this, there was a continuous rise in the Bitcoin hash rate. As global energy prices are immensely rising, there is a high chance of more companies facing challenging conditions.

  • Increasing Scarcity

There is an easy way to find out the scarcity of Bitcoin by looking at the illiquid supply of coins. In the year 2022, 572, 118 bitcoin worth $9.6 billion left the exchange. It was the largest outflow in Bitcoin history. However, Bitcoin balances on the exchange will decrease in mid-2022. But, Bitcoin miners continue to invest in equipment and on-chain data that shows Bitcoin holders are not planning to relinquish their Bitcoin this soon.

Hopefully, the above blog has helped you understand the factors to consider while investing in bitcoin in 2023.

About the Author

Rea Setia is an passionate writer. She loves to share business tips and her experience about industry.

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Author: Rea Setia

Rea Setia

Member since: Nov 19, 2019
Published articles: 41

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