Bitcoin, Crypto Leading Dollar into 2023
In 2023, bitcoin and cryptocurrency could become a force majeure in the global economy. Many leading economists believe that bitcoin and cryptocurrency will continue to lead the US dollar in terms of total market capitalization over the next decade. This is due to the rise of bitcoin and cryptocurrency as viable alternative forms of currency, which more individuals, businesses, and governments have embraced.
Leading factors
The growth of cryptocurrency can be attributed to its many advantages compared to traditional fiat models such as the US dollar. These include:
Overall faster transaction speeds;
Lower exchange fees;
Public security measures using distributed ledgers;
Enhanced privacy protection offered by decentralized networks and Zk-rollups;
Greater flexibility in cross-border payments.
Digital asset ownership
Bitcoin and crypto offer users an opportunity to own digital assets that are not subject to the same levels of government control as fiat currencies. This has enabled bitcoin and crypto users to circumvent exchange rate fluctuations and other restrictions imposed by traditional currency markets.
This increasing popularity has led bitcoin and crypto to rapidly overtake the US dollar in terms of total market capitalization in 2023, with bitcoin alone now representing more than half of all global cryptocurrency value. As a result, bitcoin and cryptocurrency have become an increasingly important asset class for investors, traders, corporations, and governments alike.
DXY analysis
At the start of 2022, bitcoin was trading at $29,836 as compared to the U.S. dollar index (DXY) at $89.62. Throughout 2022, bitcoin experienced notable volatility, peaking at a high of $47,063 in April and reaching a low of $16,441 in November. In comparison, the DXY bounced between $94.615 and $114.689 over that same period.
DXY chart for Jan-Dec 2022. Source: TradingView
Overall, bitcoin's performance relative to the dollar was strong in 2022. Although bitcoin experienced some volatility throughout the year, it still managed to close with a solid gain when compared to the DXY index—demonstrating bitcoin's strength as a reliable asset over the long term. With bitcoin's increasing popularity, its performance against the dollar will likely remain an important bellwether of bitcoin's success for years to come.
Bitcoin and crypto trends
It is clear from this trend that bitcoin and cryptocurrency will continue to lead the US dollar over the next decade, with experts predicting that their use will only increase as more countries explore ways to incorporate them into their financial systems.
Bitcoin and cryptocurrency offer investors a unique opportunity to diversify their portfolios and take advantage of digital currency's potential for growth. Given bitcoin and crypto’s growing influence in the global economy, it is likely that they will continue to lead the US dollar in terms of total market capitalization over the next decade.
As cryptocurrencies become even more widely accepted, bitcoin and other digital currencies could represent an increasingly attractive asset class. The rate at which bitcoin and cryptocurrency are gaining traction indicates that they are here to stay - making them a force to be reckoned with in 2023 and beyond.
