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Bitcoin Is Already Up 50% This Year – Outpacing Stocks and Gold

TechTechnologyBitcoin Is Already Up 50% This Year - Outpacing Stocks and Gold

Bitcoin is up 50% so far in 2023, outperforming major commodities and stock indices. Industry insiders said the bank collapse sent investors looking for alternatives to the traditional banking system and fears of a slowdown in interest rate hikes are also helping bitcoin.

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Bitcoin It is up 50% this year, outperforming major stock indexes and commodities, despite the collapse of major crypto-focused banks.

On January 1st, bitcoin started trading at just over $16,500. On Wednesday, it was hovering around the $25,000 mark, thanks to Rally started from Sunday,

The price surge this year comes after bitcoin crashed 65% in 2022 following several major project collapses. and hedge fundsbankruptcy, liquidity issues And this failure of ftxOne of the largest cryptocurrency exchanges in the world.

The recent growth has come as somewhat of a surprise, Looking at the closure of Silvergate Capital and Signature BankThe two largest lenders to the cryptocurrency industry. And the Silicon Valley banks seen as the backbone of the technology startup industry also failed.

Antoine Trenchev, co-founder of crypto trading platform Nexo, said: “Bitcoin’s 50% surge in 2023 is a reflection of how beaten it was after the FTX collapse, the changing interest rate outlook, and the failure (and resurgence) of SVB. ” CNBC.

From its peak of around $69,000 in November 2021, bitcoin is still down more than 60%.

Here are some of the main reasons why bitcoin is on the rise.

bank collapse

After the collapses of Silvergate, Signature Bank and SVB sent shock waves through financial markets, bitcoin’s rebound could be fueled by those same failures, according to Vijay Iyer, vice president of corporate development and international at crypto exchange Luno.

“The events surrounding the failure of SVB and other banks last week have also highlighted the power of decentralized currencies that can be fully custodial and held by individuals,” Iyer said. “Decentralized finance in terms of a concept for many more people is now starting to hit home.”

Bitcoin is called a decentralized currency because it is not issued by a single entity like a central bank. Instead, it relies on an underlying technology called blockchain and its network is maintained by a community.

US regulators had to step in customer deposit guarantee Although these banks

Nexo’s Trenchev said the intervention “reminds investors of the structural shortcomings of the US banking system and the US dollar underpinning it, which is why we’ve seen bitcoin take flight this week.”

Bitcoin proponents have claimed that the digital currency is a way for investors to protect themselves from central bank moves, particularly quantitative easing and loose monetary policy, which they say erodes the value of fiat currency. Proponents point to bitcoin’s finite supply as its key feature as a store of value.

interest rate outlook

Stock picks and investment trends from CNBC Pro:

“Within a few days we went from an aggressive Powell to an environment where economists were predicting that even if the Fed could not raise rates in March, bitcoin would benefit,” Trenchev said.

“It has been said that the Fed will only stop raising rates if they break something, and now that something has broken, the attention has turned to bitcoin.”

bitcoin vs stock

Bitcoin has gained 50% this year. In contrast, tech-heavy nasdaqwhich has been closely correlated with bitcoin in the past, is up 12% so far this year. S&P 500 is up 2.5%.

SleepWhich is seen as an asset that investors look to during times of market turmoil, up just over 3% this year.

There aren’t many commodities or stock indexes that can beat bitcoin. With respect to individual shares, meta Year to date is about 60%.

In major digital currencies, ether There has been an increase of 42% this year, while solana is greater than 100%.

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