Bitcoin Poised for Fresh Highs in 2023
Investors anticipate that Bitcoin will reach new all-time highs in the latter half of the year as corporate treasuries ramp up their Bitcoin acquisitions and Congress approaches crypto legislation. In the second quarter, Bitcoin saw nearly a 30% increase, despite many investors describing this period as one of consolidation, with returns tapering each month and prices fluctuating within a narrow band for more than half of the quarter.
Overall, Bitcoin achieved almost a 15% rise in the first half of this year, lagging behind the 45% gain reported during the same timeframe last year. However, many believe Bitcoin is on the verge of a significant uptrend, propelled by fresh capital directed toward exchange-traded funds and inflows from corporate treasuries, which have helped stabilize its price above $100,000 since early May. As of Sunday, Bitcoin traded at approximately $108,000, only 3% below its May peak of $111,999, according to Coin Metrics.
Devin Ryan, the head of financial technology research at Citizens, commented, “There’s still an acceleration coming here around ETF adoption. We’re just at the beginning of these treasury strategies, and more capital is on the way.” He emphasized that there is a growing mass adoption as barriers to ownership gradually diminish, suggesting that the consolidation phase is nearing its end and a rise is imminent.
Bitcoin treasury companies—publicly-traded firms that either hold Bitcoin as a primary asset or plan to—are emerging as key players. Companies like Nakamoto, Twenty One, and Strive Asset Management are in the process of merging with public entities to facilitate raising capital for Bitcoin purchases through equity offerings. Steven Lubka, vice president of investor relations at Nakamoto, pointed out that these firms are waiting for SEC approval, indicating a significant amount of capital is poised to enter the market.
Along with adoption trends, the macroeconomic landscape appears favorable for Bitcoin. Lubka noted increasing fiscal spending in Washington juxtaposed with record highs in stock markets, which could further catalyze Bitcoin’s growth. He stated, “Bitcoin’s growth as an asset class aligns with substantial capital influx through new financial vehicles, coinciding with pro-Bitcoin administration policies, making a robust bull market likely.”
Geoff Kendrick, Standard Chartered’s head of digital assets research, also highlighted the influence of U.S. regulatory developments on Bitcoin in the third quarter. A potential change in Federal Reserve leadership could alter market perceptions regarding early rate cuts, which may enhance investor confidence in the Fed’s independence. Additionally, the GENIUS Act—a stablecoin bill progressing through Congress—could likely encourage more retail investors to venture into digital assets, with Bitcoin being the likely beneficiary.
While concerns regarding Bitcoin’s four-year cycle may arise toward late September, Kendrick remains optimistic about Bitcoin’s outlook. He predicts Bitcoin could rise to $135,000 by the end of the third quarter and reach $200,000 by year-end. Although some investors may fear a repeat of previous price patterns correlating with Bitcoin halving events, Kendrick believes that increased capital flows from ETFs and treasury firms will overshadow potential selling pressure from long-term holders.
