Bitcoin and Ethereum in 2023: What Experts Think

Bitcoin hit an all-time high of $68,990 in November 2021, while Ethereum surged to $4,865 before plummeting along with the values of other cryptocurrencies. One year later, Bitcoin was down 70% from that record high, and its competitors were following in its footsteps as a consequence of FTX’s collapse in November 2022, Terra Luna crash, and the looming macroeconomic conditions. However, they kicked off 2023 with a bang in the first month, with ETH price USD rising by more than 30% and the BTC price increasing by 37%. This brings much-needed relief for crypto investors who had a difficult year.

Bitcoin and Ethereum are the two most influential and commonly traded digital coins on the crypto market. They both have the potential to perform well in the future as the world keeps shifting to digital and crypto acceptance grows. When it comes to Bitcoin, it’s worth mentioning that it’s the oldest cryptocurrency, which is one reason why it’s considered a secure investment. Similarly, Ethereum has gained tremendous popularity over the years owing to its ability to facilitate smart contracts and other apps on the network – a feature that’s not possible with banks, credit card networks, or traditional financial systems generally.

While both have experienced spikes since the year began, it’s worth analyzing past performances and acknowledging what experts think to see where BTC and ETH are heading this year. Read on to gain a better understanding of the situation of Bitcoin and Ethereum and make rational financial decisions.

Understanding what took a toll on cryptocurrencies last year

To better understand what the market will look like in the future, let’s take a step back to the FTX collapse in November 2022. FTX failed due to mishandling of funds and a lack of liquidity, followed by many withdrawals by rattled investors. It declared bankruptcy on November 11, 2022, owing to insufficient funds to satisfy client demand. This caused a ripple effect across the crypto industry, justifying the falling prices of Bitcoin, Ethereum, and other virtual currencies.

But, in January, several short sellers were pressured to close their positions and invest in Bitcoin, pushing the price higher. According to the supply and demand principle that drives price fluctuations, when demand exceeds supply, the cryptocurrency gains value. Conversely, when there’s more supply than demand, its value drops. Ethereum’s price is measured against that of Bitcoin. As these two bounced back in February, the bullish sentiment persists.  

The overview of Bitcoin

Bitcoin couldn’t stick around the levels of $25.000 and started playing seesaw and trading below $24.000 levels. It has decreased a little from its high due to the mixed sentiments toward the U.S. Fed monetary policy. However, U.S. Senator Sherrod Brown (D-OH) expressed the intent to work on crypto legislation, showing less scepticism of cryptocurrencies than before.

Fast forward, and BTC increased by almost 14%, as its price at the end of the second week of February showed. It’s worth mentioning that the Bitcoin price began to show positive signs after crossing crucial levels of $16,800.

One reason why experts are bullish on the reigning cryptocurrency is that 2024 is a year for its halving event. This happens every four years, when Bitcoin rewards to miners are cut in half. It’s an event generally regarded as positive for BTC’s price, as halving aids in contracting supply. Historically, halving has been considered a favourable indicator for reviving Bitcoin’s price.

The other factor that strengthens the bearish sentiment for Bitcoin is the U.S. Federal Reserve’s previous less aggressive rate hike of only 25 basis points, which helped this virtual asset maintain its upward trend and beat other asset classes.

Plus, “Bitcoin Whales”, or large BTC investors, have started accumulating it again, which might show the long-awaited recovery sign in the price.

Ultimately, Bitcoin had its ups and downs but has shown consistency and market stability.

The overview of Ethereum

Ethereum is undoubtedly the leading smart contract platform globally, with numerous altcoins and blockchain projects built on its chain. It is also the second largest cryptocurrency by market cap after its predecessor, Bitcoin.

It uses its programming language to create smart contracts, which are popular owing to their security and the immutability of the blockchain, showing that its use cases extend further than Bitcoin’s. 

As Bitcoin’s bull run restarted at the end of 2020, Ethereum followed suit. Most cryptocurrencies remained stagnant, but Ethereum’s growing use case assured investors of its enormous potential. Most investors didn’t anticipate its price to soar as high as it did, but it has more than doubled from its ATH in 2018. FTX’s crash, however, led to a bearish sentiment for it, with prices ranging between $1.100 and $1.700.

But it gets increasingly adopted, and the more acceptance it sees, the more likely its price will increase. With the Merge and the Shanghai upgrade scheduled for March 2023, Ethereum might become even more appealing to institutional and mainstream investors and developers.

How to approach Bitcoin and Ethereum trading

With such varied predictions on cryptocurrencies and the uncertainty surrounding them, one can only observe the prices before jumping to buy some. This is called the “wait-and-watch” mode and implies that action must be taken carefully.

Many terms can be attributed to the crypto market, and unpredictability and volatility are among the first ones. There are several predictions on BTC and ETH; some are bearish, and some are bullish. Time will tell where they’re going, and for the moment, it’s wise to create an investment strategy that includes your level of risk tolerance and future objectives. If you’re new to crypto investments, remember that you can start with as little as $10. 

Last words

Given that digital currencies are still in their infancy and have yet to be completely understood, adopted, and developed, predicting where they will go is difficult. Expert opinions vary, but ultimately, the choice between Bitcoin and Ethereum comes down to your risk tolerance and trading experience.