Bitcoin has navigated a difficult period over the past year, with prices dropping by over 70% of their initial value at their lowest point. And while the prices returned to more comfortable levels for traders at the beginning of 2023, it's clear that the market isn't back on its feet. The Bitcoin price USD has remained somewhat constant through the first months of the year. However, March has brought in a new cause for concern among traders.
The uncertain situation of Silvergate, the crypto-friendly bank currently facing some complicated problems with no definitive solution in sight, has caused unease among many institutional and retail investors, affecting the price of crypto. Now, traders are unsure of how to proceed. After a difficult 2022, it seems particularly challenging to adjust your strategy again, but it is vital to perform successful transactions.
Possible inflation
The cryptocurrency market has become more vulnerable to changes in traditional markets as well due to its gradual entrance into the world of mainstream finance. While this is generally positive, as it signals a wider acceptance of digital money as a valid form of currency, it is also troublesome during financial crises and recession events. 2022 has been a challenging year from this perspective, with inflation and interest rates higher than they had been in a long time.
Federal Reserve Chairman Jerome Powell has recently declared that inflation rates are likely to be higher than anticipated for the 2023 fiscal year. These declarations have come as a result of a discussion surrounding the possibility of faster tightening, a hypothetical situation which would also ask for an increase in the pace of rate hikes.
As a result of these claims, the price of BTC fell by nearly 2% in the immediate aftermath, reaching values below $22k. However, it has since somewhat recovered, going back to matters of around $21,900. Powell has admitted that January data regarding consumer spending, employment and manufacturing have managed to partially reverse inflationary trends. However, he has warned that there'll still be a long while before the target of 2% is reached. Moreover, the road to achieving it is likely to be quite troublesome.
New solutions
Scalability has long been an issue within the digital asset market, and while some altcoins have developed their own solutions to ameliorate this issue, Bitcoin still has a little catching up to do. This isn't the case anymore, as a newly-adopted tool previously developed and used by other blockchains has also been adapted for BTC.
Working as a modular framework for rollups could help optimize the free space within the BTC blocks, expanding the network's capabilities and making the system far more efficient. The transactions would also be grouped, helping increase privacy and security, a constant concern for the digital asset market. The solution is also likely to help expand and improve usage across all layers of the blockchain architecture. The execution layer, which hosts protocols, smart contracts and decentralized applications, among many others, can benefit from a sophisticated application of the scalability tools. The data layer, the most basic one when it comes to application, is the order of the blocks on the cyber chain, which ensures that the nodes operate in adequate synergy and the network is in good order.
Reactions to this upgrade have been mixed. While some investors have embraced it with open arms, showing their enthusiasm for the new development in the industry, others have retained their reservations. The concerns have come mainly from circumstances surrounding using the Bitcoin blockchain for anything other than financial transactions. Using the network for other purposes will limit the available space on each block, making it detrimental for users.
Crypto Expo Asia
The largest crypto-related exhibition and conference in Asia has returned in 2023 after its successful debut the previous year. Set to take place in Singapore, at the iconic Marina Bay Sands luxury hotel and resort, between the 7th and 8th of June. The event is expected to welcome at least 10,000 attendees and industry leaders. In 2022, 50 companies participated, and over 5,000 crypto investors, traders, or aficionados were in the crowd.
The number of companies attending in 2023 will double as well, with over 100 corporations and institutions coming in from more than 30 countries expected to attend. Investors will have a unique opportunity to engage with one another and discuss the many ways in which the crypto market is changing.
The event also aims to create a platform for the crypto ecosystem both in Asia and on the whole globe. Thought leaders will come to share their ideas, and the valuable insight that will result has the potential to create innovation within the cryptocurrency ecosystem.
Price analysis
The dynamism of the Bitcoin blockchain is a good indicator of whether or not the present is an excellent time to perform transactions. The innovations are also a good indicator of the fact that the market is healthy, despite the fact that it is still struggling in the aftermath of the events of 2022. And while the bearish market is still maintaining its dominion and the crypto winter is still unwilling to make room for spring, historical movements suggest that this is one of the best opportunities to purchase Bitcoin before the price increases. As a general rule, you must buy low and sell high in order to create revenue.
The current bear market trend is an auspicious time to buy coins, as the price will undoubtedly be headed towards a bullish movement afterwards. When that occurs, the best strategy will become to hodl and sell when the price reaches a new peak. These estimates have been created based on charts dating back ten years ago, to 2013.
Bitcoin's future movements will depend on several factors, including launching events, changes in geopolitics and the macroeconomic landscape, and any other developments within the financial system. To stay ahead of all of them and perform successful transactions, you need to keep an eye out for all the movements. Each of them can have a significant impact.
