Nikolaos Panigirtzoglou on Why Bitcoin Is Jumping Up So Fast

Nikolaos Panigirtzoglou on Why Bitcoin Is Jumping Up So Fast

May 17, 2023

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Nikolaos Panigirtzoglou – a global market strategist with JPMorgan, one of the biggest finance giants in the world – recently gave his thoughts on why bitcoin and several other digital currencies are up so high since the beginning of the year.

Nikolaos Panigirtzoglou Discusses His Thoughts on BTC

He commented that while the banking crisis of recent months has certainly helped bitcoin move along, there are other contributing factors as well. Panigirtzoglou said:

For crypto supporters, the U.S. banking crisis exposed the weaknesses of the traditional financial system given banks’ maturity mismatch is susceptible to bank runs. Crypto supporters have been arguing for a long time that the crypto ecosystem is superior, not least because deposits are held in entities such as stable coins, which as a digital form of money market funds, are 100% backed with high quality liquid assets and are thus less susceptible to runs.

He says the launch of bitcoin ordinals – the new non-fungible token (NFT) series that’s now available via the bitcoin blockchain – is a huge deal given how often NFTs are distributed via the Ethereum chain. He says this is going to open several doors not only for NFTs, but for bitcoin, and that more developers will likely be attracted to the network in the future when looking to establish new projects. Panigirtzoglou mentioned:

This is because metadata such as text [and] images can be inscribed on the bitcoin network itself without relying on smart contracts as seen with other blockchains, where NFTs are created through smart contracts.

Lastly, he believes the upcoming bitcoin halving – which is slated to occur in April of 2024 – is helping with the newfound bitcoin bull run. He commented that many people are becoming mentally and psychologically prepared for the maneuver, which should happen in about 12 months, and that every time, without fail, bitcoin experiences heavy price surges when a halving takes place. He said:

While this is some way away [from] ceteris paribus, this would mechanically double bitcoin’s production cost to around $40K, creating a positive psychological effect. This is because bitcoin’s production cost has historically acted as an effective lower bound.

The Asset Has Really Shot Up

Since the beginning of 2023, the price of bitcoin has shot up by more than 70 percent, a huge change from where it was during the previous year. 2022 was arguably the worst year on record for bitcoin, with the world’s number one digital currency by market cap dropping from its new all-time high of about $68,000 (which it achieved in November of 2021) to the mid-$16K range. It was a sad sight to see.

However, the price of the asset has endured a few bullish pushes over the last four to five months, and the currency appears to be well on its way to reversing itself.

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