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What’s New, Bitcoin?

Mar 24, 2023
7 min read

Bitcoin has always been an alpha currency in the Crypto World. This is actually true, because it all began from Satoshi Nakamoto’s invention, which firstly was used to pay for pizza. Now we can’t even imagine how someone could own hundreds of BTC at once back then. The pioneer crypto has grown in price since then. However, the situation has not always been stable, and as we know, the cost of BTC has dropped and raised many times in recent years. 

Let’s take a closer look at the world of Bitcoin. What is going on with this crypto asset? What to do if you are a lucky BTC holder and what’s the near future of the first cryptocurrency? These questions were answered by the analyst of SimpleSwap. 

Since the beginning of 2023, Bitcoin has shown a confident, no-corrective upward movement, after updating the minimum value of the current trend and 64-day accumulation. In terms of accumulated volumes, the accumulation zone is very large. It is the sales of accumulated volumes by large players that justify this growth. The growth of BTC from the 1st of January was more than 45%. 

Since January 18 the newsfeed was full with the posts saying that the crypto brokerage Genesis Global Capital might be preparing for bankruptcy filing. This news triggered the instant reaction of the crypto community. But the main question is still up in the air.

Why do some bankruptcy incidents cause huge crypto price drops, and others activate a quick rise? 

The answer is here: the problems of Genesis Global Capital began in July 2022 — after the bankruptcy of the infamous crypto hedge fund called Three arrows capital. 

The important role also played the bankruptcy of FTX in November. Genesis Global Capital invested $175 million in Sam Bankman-Fried’s company previously. Withdrawals from the platform were stopped. Thus we can conclude that the crypto market has long taken into account in its prices the financial problems of Genesis Global Capital back in July and November 2022.

What are BTC hodlers doing right now with their assets? Do they sell? If they do, is it a safe and wise decision to make? 

Firstly, if we consider hodlers, not speculators, then they are likely to maintain their positions with the BTC until the end of this bullish mini-cycle, which is often found in the transition of global trends. Secondly, the longer-term holders will continue to hold on until the next peak of the bullish trend. 

If you are a BTC holder, then probably the position is accumulated long enough and the value of the position in dollars is averaged for the prospect of achieving a new all-time high of the next bullish trend. In this case, it is better to keep your BTC and stick to your strategy of accumulation.

In case if you hold on to the speculative strategy and do not know whether the growth will continue or not, and FOMO doesn’t let you go, it is necessary to close part of the position and stop loss to break-even or even to a good plus. This way you will benefit in case of correction and won’t miss the continuation of the upward movement (if it will continue, of course).

What is the possible future of Bitcoin? 

This bullish mini-cycle may last up to $30,000 - $40,000, which will be about half the key bear cycle — as it was in the previous bear cycle where Bitcoin dropped from $20,000 to $3,000 and within the intermediate bullish mini-cycle has risen to $13,000:

The comments on the current situation. What's going on with BTC in spring 2023?

Amid the bankruptcy of U.S. banks and as a result of the tightening of the Fed monetary policy, Silicon Valley Bank and Signature Bank, which worked with crypto projects, have lost the opportunity to fulfill their obligations to depositors. The Federal Reserve held an emergency closed meeting in order to prevent a large-scale bankruptcy in the U.S. banking sector, as it happened in 2008. The Federal Deposit Insurance Corporation will return $250,000 to its customers, however the accounts of more than 90% of depositors contained between 6 and 9 zeros.

In order to avoid public panic and massive withdrawals from other banks, it was decided to compensate depositors of bankrupt banks and create an emergency fund in case of such situations within the banking sector. The shareholders of these banks are left out.

The size of the fund and the funds from which it would be formed were not specified. The crypto-asset community assumed that this situation would be resolved by printing of new dollars and the easing of the Fed’s monetary policy, which would lead to the emergence of new money in the economy. Similar situations, historically, have a positive impact on the rate of Bitcoin and the whole crypto market.

Based on these expectations, the BTC price may reach $30,000 by the end of March. But we should keep in mind that there was no statement by the Fed on monetary easing. The plan of the regulator at the moment still remains the same — to tighten the monetary policy and raise the rate. This puts pressure on the stock market with which the crypto market is quite closely correlated in moments of unrest.

From a long-term investment point of view, BTC shows that it inspires trust. In financial emergencies, when there’s a distrust of regulators' decisions, BTC is a defensive asset. Bitcoin exists for 13 years now and it has been increasing and updating its maximum values.

Thus, we see that Bitcoin is still far from leaving the crypto market, as some fear. The bullish trend may be just a harbinger of the bear circle. The most important thing for holders is not to panic, forget about FOMO and make sober decisions. This is the only way to not lose the capital and make profit from the situation. 

SimpleSwap reminds you that this article is provided for informational purposes only and does not provide investment advice. All purchases and cryptocurrency investments are your own responsibility.

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