Decoding The Surge And Slump: Bitcoin's 2023 Price Rollercoaster Unveiled

Forbes

Maria Gracia Santillana Linares, a Forbes reporter, joins ‘Forbes Talks’ to discuss the price swings of Bitcoin throughout 2023.  0:00 Introduction 0:19 The Surge Of Bitcoin 2:18 EFTs And The Crypto Market 4:28 The Up And Down Of Bitcoin's Market 5:42 The Maturity Of Bitcoin, What's Next?

Transcript

00:00 Hi, everyone, I'm Rosemary Miller here with Maria Grazia Santillana-Lenares, a reporter

00:08 here at Forbes, here to tell us about the price movements of Bitcoin in 2023.

00:15 Thank you so much for joining me today, Maria.

00:17 Thank you for having me, Rosemary.

00:20 Absolutely.

00:21 So Maria, could you elaborate on some of the factors that contributed to the surge of Bitcoin?

00:26 Yeah, of course, there's been a lot of things throughout the year.

00:30 We really saw kind of the power and the impact on price movements coming from regulatory

00:34 and policy concerns.

00:35 If you look at the graph, there's a lot of peaks and troughs where kind of we saw either

00:39 positive or negative views.

00:41 And so, you know, on the macroeconomic scale, inflation rate hikes, Bitcoin has kind of

00:47 always, you know, reacted regardless of whether whether the economy is moving.

00:53 This year, we really saw it kind of be seen as like the fight to safety.

00:56 So like a very interesting example of this was when Silicon Valley Bank kind of fell

01:01 in March.

01:02 It presents an interesting case study because you really saw the price increase slightly

01:07 right before the government decided to kind of protect SVB depositors.

01:11 And then as kind of the market cooled down a little bit, we saw investors and, you know,

01:16 whether that be cryptocurrency focused investors or just traditional investors kind of realize

01:20 the impact that the government has on monetary policy and the risk that your, you know, your

01:28 fiat can be in some of these traditional institutions.

01:31 Again, we saw a kind of flow to safety is what we like to call it into Bitcoin.

01:36 And then, of course, you know, it was the year of a lot of bad actors.

01:39 You know, we have the Sam Bankman free trial.

01:41 We had CZ, the head of Binance, kind of step down.

01:46 And so what's interesting compared to last year, right, we did still see some movements,

01:51 but they were much the volatility was much less compared to last year.

01:55 So while FTX, you know, fall in November of 2022 and kind of the market collapsed after

02:00 that this year, the movements were much I would say they were much smaller, which I

02:05 think to a lot of people kind of points a little bit of a maturation in the market.

02:10 You know, we're seeing this idea of bad actors and this idea of big characters priced in

02:15 already to the current price of Bitcoin.

02:18 And so I've been seeing a lot of optimism around the U.S. potentially approving ETFs,

02:24 exchange traded funds.

02:26 Could you could you tell me, like, what's the significance of that potential shift and

02:30 how might it affect the crypto market?

02:32 Oh, absolutely.

02:33 I honestly think that was one of the biggest movers in terms of the price this year.

02:37 We saw that every time there was a major announcement, you know, whether that be BlackRock, one of

02:42 the biggest asset managers in the world, filing their their intention to list a Bitcoin spot

02:47 ETF to even just news of, you know, these asset managers are meeting with the SEC to

02:53 determine what the ticker price would be for this ETF really have an impact on the movement.

02:57 So one of the biggest kind of price increases we saw was in June when BlackRock filed that

03:01 first intention.

03:02 But yeah, I think it's definitely the news of the year.

03:06 It's something that many people are expecting in Q1 of 2024.

03:09 And as soon as January 10th is the next deadline as to when the SEC would kind of have to postpone

03:15 or say that they need more time to review.

03:18 But definitely it's one of the biggest events and kind of themes that we've seen this year

03:23 in terms of the prices that every time that there is a significant and usually positive

03:27 news that'll happen, we kind of move up and even negative.

03:32 Right. Like we saw in October, I believe the SEC just missed.

03:36 So the SEC has been kind of fighting with grayscale over its ability to transform their

03:43 Bitcoin trust into a spot ETF.

03:45 And so that was one of the big court cases that we were tracking over the summer.

03:48 And in October, the SEC, you know, first, a federal court said that the SEC had to review

03:55 the application.

03:56 Right.

03:57 And so that was kind of seen as a big win for the industry.

03:58 We saw Bitcoin's price rally a little bit.

04:00 But then in October, the SEC had a deadline for an appeal where it could appeal the federal

04:05 court's decision as to whether it had to or could not look at the application.

04:10 And it just didn't file an appeal.

04:11 And that also saw a little price bump in October that we kind of saw move the industry along

04:17 like, hey, even no news is good news.

04:20 Right.

04:21 There's no other further steps kind of preventing, you know, an ETF to be passed in the foreseeable

04:26 future.

04:29 So what about the program slowdown in supply of Bitcoin?

04:33 How did that impact the rebound of Bitcoin's price?

04:36 Yeah, of course, I think you're talking about the big thing that's kind of scheduled to

04:40 happen.

04:41 I believe the latest dates put in around March, but we'll say first half of 2024, which just

04:45 means that, you know, it'll get more difficult to produce Bitcoin.

04:48 And the idea is that the price would go up.

04:51 So that's certainly something that we're looking at, you know, when it comes to next year.

04:54 And we're not the only ones, a lot of investors, people both in the crypto space and in traditional

04:58 finance are expecting, right.

05:00 Depending on when the ETF finally gets approved, it might be two events that really kind of

05:06 define what Bitcoin's price next year will be, whether they're close together, whether

05:10 they're further apart, how much it'll increase.

05:12 But yeah, essentially, right.

05:15 If you make it more difficult to mine Bitcoin, it means that each Bitcoin is more valuable.

05:19 And so the price should theoretically go up.

05:23 There's still a lot of kind of questions and I think speculations as to what that final

05:27 price will be and what will the baseline be.

05:31 But it's something that we're still keeping an eye on.

05:33 You know, when we think of the first half of 2024, it's something that will definitely

05:37 define what Bitcoin's year in terms of price will look like.

05:42 So how has the crypto market evolved in terms of maturity?

05:46 Yeah, I think it's definitely something that, you know, you talk to people in the industry

05:50 and also a little bit of crypto skeptics, too.

05:52 And it's definitely compared to last year, we're matured.

05:55 And I think the biggest evidence to that is just how these bad actor movements are priced

05:59 in.

06:00 Right.

06:01 Again, if we look back to November of 2022, when FTX fell down, crypto decreased.

06:06 I can't give you the correct amount right now, but over the year it was something like

06:10 65 percent.

06:11 That's following a year where it hit a peak of $65,000 a coin.

06:15 For reference, 2023 started at $16,000 a coin and we're ending around the $41,000 to $43,000

06:22 range.

06:23 And so, again, you see a big variety here.

06:26 The fact that we've had any kind of price volatility movements following that actor.

06:30 So again, say, Bitcoin being convicted, it was still there.

06:34 Right.

06:35 There was kind of like a reassurance and kind of like a little dip before it went back up.

06:39 And then I think the biggest one was when CZ kind of, you know, stepped down from Binance

06:44 as part of a $4 billion settlement with the Treasury and the DOJ.

06:49 That, you know, again, still volatile.

06:51 We still saw some movements, but it was definitely in terms of magnitude, much less than it would

06:56 have been in years past.

06:58 And so I think that is reassuring a lot of investors that, you know, OK, things can happen.

07:04 Right.

07:05 And we always talk about the U.S. audience in the U.S. market is very focused on these

07:08 regulatory actions and these bad actors.

07:11 While Asian markets sometimes don't react as quickly to that.

07:16 But I think that's the biggest thing, at least for me, you know, that like maybe we're becoming

07:19 a mature, a more mature market if we're at a complete, you know, you have to define what

07:26 a mature market looks like.

07:27 The whole are we there yet?

07:29 Is the market perfect?

07:30 No, there's still movements.

07:31 In an ideal world, there wouldn't be that many.

07:34 But it's definitely I think we're growing past a little bit of the speculation and the

07:38 big highs and lows of 2021 and 22 and stabilizing a little while still seeing some growth.

07:44 Maria, this has been great.

07:46 Thank you so much for joining me today.

07:48 Of course.

07:49 Thank you so much for having me.

07:50 Absolutely.

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