The Last Six Months: A Brief Overview

So, what led to this surge in the past six months? Here’s a timeline of key events:

• Sept: Ethereum's Merge
• Oct: 14th Anniversary of the Whitepaper
• Nov: FTX Collapse
• Dec: Crypto Contagion
• Jan: Bull Market Opens 2023
• Feb: Speculation on Macro Catalysts

While traditional markets have begun to cool off after a strong early start, February's economic indicators show persistent inflation. This news has led to a surge in Bitcoin and other risk assets. The pressing question is whether this rally has a solid foundation. If not, dwindling investor liquidity could signal a potential correction.

In macroeconomic terms, keep an eye on:

• Upcoming US PPI data
• Anticipated rate hikes

Recent data revealed that US wholesale prices experienced their highest increase since last summer, indicating that inflation is proving to be stubborn and may not decline swiftly. Consequently, the Federal Reserve may consider more frequent or larger rate hikes in 2023.

Back to Bitcoin: The Ongoing Narrative

The core narrative surrounding Bitcoin remains unchanged. As the pioneering global, private, decentralized, peer-to-peer digital currency, Bitcoin continues to operate reliably, processing transactions in a block-by-block manner and enhancing financial options globally.

What’s New in Bitcoin?

Recent developments have introduced "Ordinals" and inscriptions, which have attracted attention. As Bitcoin gains users, the ability to inscribe NFT-like data onto the blockchain has prompted interest from altcoin and NFT enthusiasts. However, this innovation has sparked debate within the community. Some believe it expands Bitcoin's financial utility, while others argue it diverts focus from Bitcoin's primary function as a digital currency.

Personally, I've fluctuated between both perspectives, but currently, I view this as more of a transient trend rather than a long-term competitor to Bitcoin's fundamental value. Nevertheless, attracting new users to Bitcoin is undoubtedly beneficial.

Ethereum Updates

Ethereum is also undergoing significant changes, though much of it follows its usual pattern. Historically, Ethereum has been more experimental and centralized compared to Bitcoin, with frequent updates to its roadmap. Currently, users are eagerly awaiting the chance to un-stake their coins, a feature that is yet to be implemented. Approximately 14% of all Ethereum is currently locked in staking services as early adopters sought returns.

This un-staking feature may be introduced as soon as March with the Shanghai Upgrade. Meanwhile, regulatory scrutiny, particularly from the SEC and Gary Gensler, is complicating matters for Ethereum. The SEC's recent actions against Kraken's staking services serve as a cautionary tale for other exchanges, particularly in light of the FTX collapse.

As developments unfold around Ethereum, their potential impact on prices could resonate throughout the broader crypto market.

Your Key Takeaway

Seeing Bitcoin rise to $25,000 is a positive sign. Healthy price movements are always encouraging. The interplay of macroeconomic conditions and investor liquidity will ultimately dictate the sustainability of this rally. However, for now, Bitcoin's performance in 2023 has been impressive.

In this video, we discuss the implications of Bitcoin's drop of $10,000 from its record high, exploring market sentiments and investor reactions.

This video highlights Bitcoin's remarkable journey, reaching an all-time high of nearly $70,000, analyzing the factors contributing to this surge.

Thank you for reading! Please remember that I am not a financial advisor, and this is not investment advice. All opinions expressed are my own. If you're interested in more content like this, consider subscribing to my weekly newsletter.