Cryptocurrency markets experienced a significant downturn in 2022, but now it appears that renewed interest from investors has caused a thaw in the so-called ‘crypto winter’. In my opinion, there is one digital asset that stands out from the rest.
With a 70% increase in its price in 2023 (as of April 5) Bitcoin (BTC -0.57%) has the highest market cap of any crypto, at $544 billion. This is larger than some of the world’s most valuable corporations, such as Visa, ExxonMobil, and Walmart, and it holds a 46% dominance over the entire crypto market. Despite this impressive performance, however, it is still nearly 60% below its all-time high of almost $69,000 from November 2021.
At this reduced price, there is still potential for Bitcoin to surge in value. This may be enough to attract investors and even those who were previously waiting on the sidelines, making it my top pick to buy in April.
Bullish catalysts driving demand
There are also some important catalysts that could drive Bitcoin’s price even higher. Every four years, the network undergoes a “halving”, where the amount of Bitcoin miners receive as a reward for processing transactions is reduced, decreasing the number of new coins entering the market. This effectively reduces the inflation rate of the network and has historically been a bullish event for the price of Bitcoin. With the next halving slated for April 2024, now is a great time to buy.
Recent events have also highlighted the potential of Bitcoin as a safe haven. The collapse of certain regional banks has caused investors to worry about the security of the entire financial system, and the Federal Reserve’s aggressive rate hikes have not helped. As Bitcoin is not regulated by any central authority and is not built on a fractional reserve system, it could be seen as a possible hedge against any financial disasters. That said, it is worth noting that Bitcoin and other cryptos are not protected by the FDIC.
The news of SVB Financial being shut down by regulators on March 10 has driven the price of Bitcoin up by an incredible 38%. This could be an indication of how the market is viewing Bitcoin favorably during these uncertain times.
The Fed is struggling to control inflation while trying to ease concerns in the banking industry, and no one knows what the future holds. It is likely that the central bank will cut its interest rates by the end of 2023, which could prompt investors to pour more capital into Bitcoin. For all of these reasons, I believe Bitcoin is the best crypto to invest in for April.
SVB Financial provides credit and banking services to The Motley Fool. Neil Patel has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin, SVB Financial, Visa, and Walmart. The Motley Fool has a disclosure policy.
