After shedding roughly two-thirds of its value in 2022, the cryptocurrency market is experiencing renewed interest from the investment community this year. Maybe the so-called “crypto winter” is starting to thaw, with money flowing back into digital assets.
Amid the heightened optimism, there’s one top crypto that stands out above all the others, in my opinion. With its price already up nearly 70% in 2023 (as of April 5), Bitcoin (BTC -0.58%) is my top cryptocurrency to buy in April — and it’s not even close.
Still well off its all-time high
Thanks to a huge price run-up this year, Bitcoin’s market cap has soared, too. It now totals $544 billion. This is a larger value than some major corporations, like Visa, ExxonMobil, and Walmart. And as of this writing, the world’s most valuable cryptocurrency accounts for 46% of the entire market. This dominance clearly exemplifies Bitcoin’s leading position.
However, at roughly $28,000 per coin, Bitcoin is still nearly 60% off its peak price of nearly $69,000 from November 2021. The highest inflation seen in decades, and that is still elevated today, led the Federal Reserve to hike interest rates aggressively. This turned out to crush the prices of digital assets, Bitcoin included, throughout 2022. Even with its price rising this year, Bitcoin still has a long way to go to claw back its losses and reach new highs.
At the current discounted price, well off the all-time high, Bitcoin’s upside could still be massive. This simple viewpoint could be enough to attract investors, mainly those who have been sitting on the sidelines, to buy the top crypto in April.
Important catalysts can push the price higher
There are also some important catalysts that could drive Bitcoin’s price to new heights. Roughly every four years, Bitcoin’s network undergoes what is known as a “halving.” This is when the amount of Bitcoin that miners are rewarded for processing transactions gets cut in half, reducing the supply of new Bitcoin that enters the market. It basically cuts the network’s inflation in half, and it has historically been a bullish time for Bitcoin. After all, if demand rises over time, but Bitcoin’s outstanding supply increases at a slower rate up to its hard cap of 21 million, the price should go up. With the next halving slated to happen in April 2024, now might be one of the best times to be a buyer.
Additionally, Bitcoin could be a beacon of hope in light of the disturbing turmoil that has shaken the financial services industry in recent weeks. The collapse of important regional banks has caused investors and depositors to worry about the stability of the entire financial system, calling into question the central bank’s ability to truly understand various bank balance sheets and overall systemic risk.
Since it’s outside of the control of any central authority and not built on a fractional reserve system like our banks are, Bitcoin could attract investment from people trying to find a place to park their capital as a hedge against financial catastrophe. Though, investors should keep in mind that Bitcoin and other cryptos are not insured by the FDIC.
Bitcoin’s price is up an incredible 38% since news broke about SVB Financial, and more specifically, that Silicon Valley Bank was being shut down by regulators on March 10. This can be a possible indication of how the market is viewing Bitcoin favorably during what has been a scary and messy situation.
Plus, macroeconomic uncertainty is still top of everyone’s mind. The Fed is juggling its goal of trying to tame inflation with the objective of trying to ease fears in the banking industry. As a result, no one has any idea what the future will hold. Many experts believe the central bank will not only put an end to its rate hikes, but reverse course and reduce rates, by the end of 2023. This accommodative policy stance could be enough to drive greater capital in-flows from both individual and institutional investors into Bitcoin. This situation makes Bitcoin my top crypto to buy in 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.
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