Towards the back end of 2022 and into the New Year, a viral meme joke was going around CT (Crypto Twitter). It claimed that Bitcoin was now a stablecoin, pegged to the value of $16,800 USD. The basis of the joke was, of course, that BTC had seen little price action over the Holiday period, staying in a tight range for almost two weeks.
The lack of volatility had scalp traders up in arms, with many complaining that the price action was so limited that it had become boring. As we know, crypto is rarely boring. However, there was a little bit of truth in the meme, something that investors should maybe think about in 2023. Namely, that Bitcoin might feel a little dull at the moment, but it still might be the safest bet this year.
BTC has the Rolex-like allure for casual investors
Of course, BTC is still held up as the king of crypto, and it’s certainly the most alluring for casual traders or those new to the industry. It has the broadest appeal. If you check out Metaspins crypto casino online, for example, you will see that, despite accepting numerous cryptocurrencies, all the player promotions are currently for BTC prizes. It’s understandable, like giving away a Rolex in a competition where you can win a watch.
For many, holding – or “hodling” – BTC is a no-brainer. They see it as the safest bet, the blue-chip stock, in the Crypto Winter. Of course, you can put forward an argument for holding stablecoins as a safer alternative, but we saw in 2022 that stables can be, well, unstable. But BTC proponents believe that the largest crypto by market cap will be the one to lead us out of the bear market, with altcoins following in its footsteps. Once BTC breaks out, there will be plenty of time to get into alts.
Perhaps more importantly, there is a firm belief that BTC will be around when many alts will not. That assertion is always going to be tempered with how you view the market in 2023, with many believing that the worst is yet to come. Some of the most skeptical analysts have pointed to many large-cap cryptos failing in 2023. BTC, they say, could see more downward pressure, but they see that as more of a buying opportunity for the next bull run.
A risk versus reward question
We must, of course, point out that this is a balance of risk and reward. If BTC were to regain its all-time high again in the next bull run, then it would be somewhere around 4X its price today. Some would say that the ‘value’, therefore, is found in alts that could see exponential growth during the next bull run. But again, it depends on your perspective. There are many who believe there is a bloodbath coming, and your favorite alts could be wiped from existence.
The point is a logical one. If Bitcoin were to drop below $10K, what would that price action do to the rest of the market? Your BTC net worth would drop by 40% or so, but as many bearish analysts are keen to say, your bags of alts might be destroyed. Of course, we can argue that ETH, like BTC, is too big to fail, but one might also say that ETH has a lower floor if market conditions worsen.
In the end, it will be up to the individual investor. But you can find a lot of traders right now saying that they are only in stablecoins, BTC, and to some extent, ETH. Perhaps they are wrong, and fortune will favor the brave for those diving into alts right now. But if more pain for the crypto market comes in 2023, they might be in the safest of havens.
