Bitcoin holders witness a staggering $500 billion increase in wealth in 2023.
Bitcoin’s market capitalization has seen significant growth in 2023, surging from $320 billion to $827 billion, resulting in a $500 billion increase for BTC holders, according to Matrixport.
A recent report by Matrixport, a crypto investment firm based in Singapore, argues that the role of U.S. inflation is crucial in the accumulation of Bitcoin wealth.
Over the past year, official inflation in the U.S. has dropped from 8% to 3.1%, and analysts predict a further decrease to 2% in 2024.
Despite the Federal Reserve’s indication of interest rate reduction in 2024, analysts believe that the gap between Fed Funds rates and the Consumer Price Index (CPI) will remain constant, leading to further accumulation of Bitcoin wealth.
The report highlights that macroeconomic factors are poised to support higher Bitcoin prices in 2024, as miners typically limit the supply of new Bitcoins during halving cycles.
However, analysts caution that crypto investors should not expect another rally in 2023, as historical data shows that Bitcoin has only experienced a few percentage points increase between December 24th and December 31st.
With reduced market activity anticipated during the Christmas holidays, Matrixport also predicts a decrease in the funding rate. However, there may still be heightened volatility as traders hedge their positions in anticipation of the potential approval of a Bitcoin spot exchange-traded fund (ETF).
According to previous reports, K33 Research analysts expect the U.S. Securities and Exchange Commission to approve spot Bitcoin ETFs “within the next three weeks” amidst a flurry of updated S-1 filings from issuers like BlackRock.
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