It has been a dismal 12 months for the crypto market, which has included a protracted crypto winter that now appears like it is going to be prolonged after FTX, one of many world’s largest crypto exchanges, just lately filed for chapter.
Not solely does the corporate nonetheless owe plenty of its prospects cash, however founder and CEO Sam Bankman-Fried seems to have been concerned in some criminal activity, reminiscent of utilizing buyer funds to bail out the crypto buying and selling agency he additionally owns, Alameda Analysis.
Now, the troubles are spreading to different crypto corporations, and investor confidence is at an all-time low. Whereas it is arduous to be tremendous bullish on the trade close to time period with the entire uncertainty, my prime cryptocurrency buy-and-hold-long in 2023 is none apart from the world’s largest cryptocurrency Bitcoin (BTC -2.27%), — and it isn’t even shut.
Here is why.
There are actually 1000’s of cryptocurrencies, most of which provide nothing particularly apart from the identical cost performance that just about all cryptocurrencies have. I might see plenty of these cryptocurrencies ultimately shutting down.
However I undoubtedly consider Bitcoin is right here to remain. It is the pioneer of cryptocurrencies and blockchain know-how. The know-how, particularly, is already disrupting the funds house considerably, and I might anticipate it to ultimately disrupt many different industries, together with cybersecurity, healthcare, and cloud storage.
Bitcoin would not actually have any distinctive technological benefit anymore. Its community processes lower than 10 transactions per second, far slower than many rival cryptos. Moreover, the community remains to be very energy-intensive as a result of it nonetheless operates on a proof-of-work consensus mechanism through which miners use large quantities of computing energy to attempt to resolve a cryptographic puzzle as quick as attainable, which in flip awards them Bitcoin tokens.
Nonetheless, Bitcoin has a finite provide of 21 million tokens, which some consider makes it a hedge towards inflation, or “digital gold,” as some would say.
Whereas I’m not solely certain about this, I do assume this finite quantity offers the token much more worth. Many cryptocurrencies haven’t any cap on circulation, which may make it tough for them to create a horny supply-and-demand dynamic.
Bitcoin can be the cryptocurrency that appears to have gained essentially the most mainstream acceptance. For example, lots of the giant Wall Avenue banks have begun providing shoppers entry to Bitcoin-based funds. Many custodian banks may obtain and retailer Bitcoin for shoppers, just like some other asset. There are additionally 2,300 U.S. companies — not together with Bitcoin ATMs — that settle for Bitcoin, and greater than 15,100 worldwide. There have even been two international locations, El Salvador and the Central African Republic, which have made Bitcoin authorized tender.
Close to-term uncertainty however a vibrant future
Given the whole lot that has occurred with FTX, I might anticipate the crypto winter to last more than initially anticipated. In the end, there’ll most likely should be extra regulation to offer readability and provides traders their peace of thoughts again — not that the FTX scandal harm the validity of Bitcoin.
Hopefully, the scandal plus additional regulation will weed out extra of the unhealthy actors and fraudulent tokens and pave the way in which for additional adoption of Bitcoin, whether or not it is via additional institutional curiosity on Wall Avenue, better use of Bitcoin in commerce, or the flexibility to purchase, promote, and maintain Bitcoin in a smoother, safer vogue. A latest survey of two,000 prospects by The Motley Idiot discovered that 62% would take into account buying extra crypto if they may retailer it in a checking account.
All of this leads me to consider that Bitcoin shall be right here for the lengthy haul and see good appreciation alongside the way in which. With the value down greater than 65% this 12 months, this may be my prime cryptocurrency to purchase as we head into 2023.