2023 was a good year for 2023. And given the massive withdrawals of bitcoins from exchanges, the trend seems set to last.
Bitcoin 2024, better than 2023?
The year 2023 is generous for bitcoin with an increase of almost 160% at the time of writing these lines.
Quite exceptional too, the bitcoin drawdown was less than 20%. In other words, it has never fallen more than 20% between two consecutive highs. Conversely, from 2019 to 2022, the drawdown was twice greater than 50%.
This performance makes bitcoin the second asset with the best Sharpe ratio in the world. That is to say the best performing asset taking into account its risk (volatility).
On-chain activity continues to argue in favor of bitcoin. The quantity of BTC on exchanges is at its lowest since April 2018.
This week, nearly 25,000 BTC worth $1 billion left exchanges. More than 28,000 BTC left them on Wednesday alone, representing the largest BTC outflow in a year.
The overall balance of BTC found on addresses known to belong to the exchanges is now 2,327,000 BTC, or 11% of all bitcoins in circulation.
It’s good news. While bitcoins generally return to exchanges to be sold, BTC outflows suggest a long-term investment strategy.
70% of bitcoins have not moved for 12 months or more. Investor conviction has rarely been so strong. Prices will have to rise significantly for these HODL’ers to turn into sellers.
By the way, we should not panic if large quantities of BTC flow onto the Coinbase exchange early next year. These will be BTC which will feed the ETFs in the event of a green light from the SEC. Coinbase, listed on Nasdaq, is the custodian of nine of the 12 ETFs offered in the United States.
Speaking of ETFs, December 29 is the deadline for submitting ETF applications. Investment funds that are on time can hope for a green light from January.
We should then first observe a new upward movement in bitcoin while waiting for the new boost that the halving will cause by halving the rate of bitcoin creation.
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