Hosts Akiba and Nicholas Gregory discuss the state of the Bitcoin market in 2023 in the latest episode of the Bittalk podcast.
The episode begins with Akiva asking Nicholas what he thinks about the future of Bitcoin this year.Nicholas first talks about recent events involving Bitcoin developer Nuke Jr. Nuke Jr. had his PGP key compromised and over 200 bitcoins stolen. The event led to a discussion about the importance of keeping Bitcoin safe, and the phrase “not your key, not your Bitcoin” was widely used. We warn against using signature security measures as they can be complex and must be thoroughly tested. He instead suggests diversifying storage methods, such as using a combination of hardware wallets, multisigs and custodians, which could be a good approach.
Nicholas then brings up the topic of password managers, explicitly mentioning the breaches LastPass suffered and the potential for customers to become targets of phishing attacks. He recommends using an open source password manager like Bit Warden and running it locally for added security.
The conversation turns to discussing the current state of the Bitcoin market. Nicholas presents some charts showing futures contract usage and buyer activity in different regions. One chart shows the relative abundance of put and call options. Green indicates a high put option premium and red indicates a high call option premium. Another chart shows the total amount of funds allocated to open futures contracts, with April 2021 and he peaking in November, followed by a decline in risk in the months ahead. The third chart shows the use of cash and cryptocurrency margin in futures contracts, with a significant increase in the use of cash margin in the second half of 2021.
Ah crypto slate The graph shows monthly price changes of accumulation or circulation in the Asian, European, and US Bitcoin markets. Asia has been characterized as ‘smart money’ and the rest of the world as ‘dumb money’. The final graph shows the percentage of bitcoin supply held in long-term and short-term investments in different areas. Asia has a high share of long-term investments, while the US and Europe have a high share of short-term investments. .
Nicholas expects Bitcoin market risk to continue to decline in 2023, creating a “flight to safety” in the market as investors shift to cash margins on stablecoins and futures contracts I conclude by stating that it is possible.
Overall, this episode provides valuable insight into the current state of the Bitcoin market and the importance of keeping your digital assets safe. Furthermore, remember that while Bitcoin and other cryptocurrencies offer many benefits, they also come with their own risks that must be carefully managed.