2023 Recap: Crypto’s Biggest Trends
By Anju B Nair, Sr. Technical Content Writer, Kerala Blockchain Academy
As we bid farewell to 2023, let’s take a moment to ponder a year that has proven to be a thrilling ride for the cryptocurrency realm. This period witnessed remarkable expansion in Bitcoin, groundbreaking advancements in blockchain technology, and a surge in market enthusiasm that exceeded all predictions. From the meteoric ascent of Solana to groundbreaking developments in modular blockchains, 2023 has been marked by significant milestones and captivating progress. Despite the overall subdued state of crypto markets throughout much of the year, the standout feature of 2023 lies in the last few months.
Fueled by macroeconomic factors, regulatory stability, and positive developments in ETFs, the year concluded with a spectacular bull run, turning 2023 into an absolute rollercoaster filled with twists, turns, and breathtaking moments. This year has also reshaped our view of cryptocurrencies and blockchain technology. Let’s take a look at the year that went by!
1. Bitcoin’s Bull Run
Phenomenal Growth: Bitcoin has taken the spotlight as the standout performer of the year, showcasing an impressive Year-To-Date (YTD) surge of 163%. This exceptional performance has surpassed traditional markets, leaving the Nasdaq (44%), S&P 500 (18%), and Gold (12%) trailing in its wake.
Steadiness in Volatility: Surprisingly, Bitcoin experienced its lowest level of volatility in 2023 since 2016. In 15% of the trading days, price fluctuations of 3% or more were observed. This consistent stability underscores the increasing maturity and acceptance of Bitcoin.
2. SOL and LINK: The Dark Horses
Solana’s Stellar Surge: SOL stood out as the ultimate outlier, boasting an astonishing 567% year-to-date gain. This wasn’t just a good performance; it was truly extraordinary.
Chainlink’s Robust Rise: Chainlink experienced notable momentum, particularly as the Real World Asset (RWA) gained widespread popularity. This surge echoes its impressive 2019 performance, surpassing that of Bitcoin. Within the top 20 crypto assets, SOL and LINK stood out as the only two to outperform BTC.
3. Spot Volume: Peaks and Valleys
BTC and ETH Volume Trends: The trading volumes of Bitcoin and Ethereum presented a varied picture — fluctuating between highs and lows, yet consistently intriguing. The initial six months of the year were notably turbulent, marked by surges in trading activity prompted by significant news events.
The Lull and Surge: A decline in trading activity was observed after May. Nevertheless, as the year advanced, increasing enthusiasm for ETFs and a growing interest in Bitcoin exposure contributed to a consistent uptrend in trading volume. This signified a positive trend for the overall health and interest in the cryptocurrency markets.
4. The Blockchain Ecosystem: A Year of Innovation
Ordinals’ Explosive Growth: Ordinals took the Bitcoin world by storm, with inscriptions ballooning from a mere 4 to over 50 million. This innovation has opened up a new world of digital artefacts (akin to NFTs) on the Bitcoin blockchain.
New Entrants: Base and Friend.Tech: Coinbase took a distinctive approach with Base, introducing an L2 chain without its token. The excitement gained momentum with Friend.Tech, a SocialFi app enabling users to trade shares of their preferred crypto influencers.
Modular Blockchains: Modular blockchains revolutionised the landscape, improving transaction speed and scalability. Celestia, featuring Data Availability Sampling, captured widespread enthusiasm. Following its mainnet launch on October 31, its token, $TIA, experienced a remarkable surge of 483%.
5. Bitcoin’s Robust Long-Term Outlook
Inflation and Hard Cap Benefits: As governments continue to print money, Bitcoin’s hard-capped supply at 21 million becomes increasingly attractive. With the upcoming halving in April 2024, this scarcity factor is only set to intensify.
MVRV Graph Insights: The MVRV ratio continues to linger at approximately 1.28, indicating that despite a remarkable 150% surge this year, Bitcoin remains an attractive investment for those seeking to build their holdings.
6. The Era of Stubborn Holders
Despite the notable gains this year, individuals holding Bitcoin have steadfastly committed to retaining their assets. The proportion of long-term holders has exceeded 70%, indicative of a resolute belief in the future potential of Bitcoin.
7. Miners Rejoicing: A Lucrative Year
Fee-Based Windfall: In the past few weeks, Bitcoin miners experienced a windfall as transaction fees surpassed the 6.25 BTC block subsidy. This transition towards a revenue model based on fees marks a noteworthy development in the future economics of Bitcoin mining.
Marathon Digital Holdings: Marathon Digital Holdings, a prominent mining company, has witnessed a threefold increase in market capitalisation since November and is preparing for a substantial $179 million investment in developing new mining infrastructure.
What do you say?
Will the next year be the year with the impending Bitcoin Halving?
Disclaimer: Crypto-asset or VDA investments are subject to market risks such as volatility and have no guaranteed returns. Please research before investing and seek independent legal/financial advice if you need investment clarification.
