2023 Was Good to Bitcoin. Will 2024 Be Better?

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2023 Was Good to Bitcoin. Will 2024 Be Better?

For Bitcoin, 2023 has been one of the most bullish years in the cryptocurrency’s existence. Here is the value of Bitcoin in U.S. dollars since the beginning of the year, as compared to the Nasdaq index, which itself had a not-shabby year:

All markets carry random, possibly irrational elements. Crypto markets are especially opaque, because the value of cryptocurrency is, for the most part, not tied to anything that exists in the physical world—compared, say, to the price of a stock, which is at least in theory tied to a company’s present and future earnings.

The conventional explanation for Bitcoin’s 2023 rise has been the presumed imminence of a spot Bitcoin exchange-traded fund (ETF) in the United States. After years of turning down such proposals—even while approving a Bitcoin futures ETF—the Securities and Exchange Commission (SEC) has shown signs of relenting, after losing a lawsuit from Grayscale over converting its Grayscale Bitcoin Trust into an ETF. Since then, the SEC has been working with various firms, including behemoths like Fidelity and Blackstone, on spot Bitcoin ETFs, and the consensus is that in January there will be a flood of a dozen or so spot Bitcoin ETFs on the market.