As 2023 comes to a close, looking back, it has been an incredible year for Bitcoin and much of the rest of the crypto market. In 2023 we witnessed the price of BTC increase by over 150%. We have also seen many altcoins since the end of September increase in value by hundreds of a percent, most notably Solana at about 500%.
Solana Daily Chart
Just one year earlier though things could not have appeared darker for all of crypto. After the bull market peak in November 2021 it was mostly all downhill for prices. But, that alone is not uncommon, anyone who has been around the crypto market very long expects this. What followed though, was not expected and caught many crypto diehards off guard.
The first four months of 2022 were pretty normal with the usual bear market price action, but then things quickly changed in May with the collapse of the Terra ecosystem. A leading cause of the collapse was a run on a blockchain-based borrowing and lending protocol (Anchor), who promissed high yields to its stablecoin (UST) depositors. Extensive research has shown that the run on Terra was very complex and happened across multiple blockchains and assets. At the core was growing concerns about the viability of the Terra ecosystem. It only took a few large holders of UST to adjust their positions which had a cascading affect and other large traders followed. In the end $50 billion in valuation was wiped out with many investors experiencing huge losses.
That collapse alone was a major event but what no one saw coming was the contagion which took down some of the largest players in the cryptocurrency space. Over the next few months, Three Arrows Capital (3AC), Voyager Digital, and Celsius all filed for bankruptcy.
Following that string of failures the market seemed as though it had settled down but then in November FTX, started having liquidity issues. Within a week FTX filed for chapter 11 bankruptcy. Now the Terra collapse was seen as a big event but the collapse of FTX was an order of magnitude larger. To put this into perspective in May of 2022 FTX had surpassed Coinbase as second-biggest centralized crypto exchange. The collapse of FTX capped a year that most in the crypto space were glad to see end.
After an excruciatingly difficult 2022, 2023 turned out to be a breath of fresh air for the crypto space. And now moving into 2024, we may see two firsts in the next few weeks. A spot Bitcoin ETF (or multiple) and a weekly golden cross (barring a substantial price decline soon).
Bitcoin Weekly Chart
As we all know, anything can happen but looking past the horizon into 2024 and 2025 it appears as though things are aligning for an incredible crypto bull market. This doesn’t mean that there won’t be deep corrections along the way, after all we are talking about Bitcoin here. But as we have seen in past bull markets, they are just a normal and healthy part of the process. So, buckle up because the next 18 to 24 months could well be the most exciting that we have ever experienced.
