Bitcoins forecast for 2023 is for instability
Risk assets demonstrate a promising scenario, after the release of the US inflation report on Tuesday (13) confirming the expected cooling of the Fed’s liquidity tightening (Federalista Reserve) – the country’s médio bank.
However pressure on Bitcoin (BTC) may remain, under circumstances several miners will likely go bankrupt, clouding the improvement in macroeconomic conditions, according to investment giant VanEck.
This year, Bitcoin miners have been hit by rising operating costs and the falling value of BTC. Miners’ profits are closely connected to the value of BTC, as they are the ones who receive the cryptocurrency as payment for solving complex mathematical puzzles to examine transactions on the blockchain.
Rewards earned are constantly liquidated to fund operating costs. If the price drops, as happened this year, this leads to the mining company’s capitulation – a situation in which the weak miners withdraw from the market, negotiating their reserves and adhering to an even greater price drop. In extreme cases, capitulation can reach a “death spiral”, meaning a period of sharp decline.
Miners find themselves hoarding their coin stash in an attempt to cope with adverse market conditions. Blockchain analytics firm Glassnode has tracked data that points to a drop of more than 25,000 BTC ($444 million) in the balance held in miners’ wallets since July, reaching 1.818 million BTC, the biggest drop in 14 months.
Something that can continue, since most of the companies involved in mining are suffering from the loss of money. If this drop reaches $12,000 it would mean an 82% decrease from BTC’s all-time high of $69,000 reached in November last year.
The two markets, which showed previous lows, lost pace reaching 85% decrease in relation to the then records. VanEck expects financial institutions to “tokenize” more than $10 billion in off-chain assets, as well as a new, decentralized stablecoin, which could reportedly reach $1 billion in market cap.
Brazil does not go unnoticed by the investment giant, it sees the country becoming one of the most “crypto-friendly” countries in the world and by tokenizing parts of the supreme debt offerings on blockchain, Ripple fails in the lawsuit against the SEC ( Securities and Exchange Commission) and Ethereum (ETH) with a green light for withdrawal on its “Beacon Chain” network.