The Monthly Report
Bitcoin and Markets - Jan. 2023
30% Gains
2023 is here!
and…
Bitcoin has once again made itself known in the new year. It’s off to a hot start in 2023, gaining nearly 30% in January alone.
Last week, I talked about the recent price action. Bitcoin (and crypto markets as a whole) have rebounded since the shock of the FTX collapse.
On New Year’s Eve, bitcoin was still near lows it previously touched in mid-November. It opened January at $16,547.91. With the monthly close in the books, the world’s largest cryptocurrency by market cap ended January at $23,127.28.
14 Years Old
January is significant.
In January 2009, Satoshi Nakamoto released the first block of bitcoin transactions known as “The Genesis Block.”
Within a week, he was collaborating with fellow software developer Hal Finney and the two went to work getting the bitcoin network up and running.
Hal even tweeted this:
2023
14 years later…
…a pattern has emerged.
The first bitcoin transaction in exchange for a good or service didn’t occur until more than a year after the network was online.
On May 22, 2010, someone paid 10,000 bitcoin for some pizza!?!? May 22nd is now known as Bitcoin Pizza Day. Roughly a year after that, we finally had developed trading markets around bitcoin.
The Halving
Trading markets, combined with aspects of bitcoin’s built-in monetary policies such as the bitcoin halving, have established a year over year trend of three up years followed by one down year.
We just wrapped a down year…
History would say that bitcoin rallies in 2023. The FTX collapse, on top of an already bloody second half of 2022 due to other failed crypto lenders, have even primed bitcoin to touch two-year lows, leaving a lot of room for upside in the year ahead.
Exact price points asides though, it’s important to note where we are in the bitcoin halving cycle. Bitcoin follows a four-year market cycle based around something called the halving. I’ve written more in depth about the halving but it’s important to note we’re about a year and a half out from the next halving event.
You can dive deeper into why that’s significant here but, for now, know that 2023 will be a year where traders, long term holders, and newcomers alike all start paying a lot of attention to the halving. People will try to predict price action before, during, and after it but the only thing that’s proven true historically is that, on a long enough timeline, bitcoin’s price appreciates between halvings.
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