Bitcoin surges in 2023 after tumultuous 2022
Despite the collapse of major crypto-focused banks, bitcoin has surged by 50% this year, outperforming major stock indexes and commodities.
Bitcoin price surges despite setbacks
Starting the year at just over $16,500, bitcoin is trading around the $25,000 mark, thanks to a recent rally. Bitcoin’s price experienced a significant surge this year, following a 65% crash in 2022.
This crash was attributed to several factors, including collapses of projects and hedge funds, bankruptcies, liquidity issues, and the failure of FTX, one of the world’s largest cryptocurrency exchanges.
Despite the closure of two of the largest lenders to the crypto industry, Silvergate Capital and Signature Bank, and the failure of Silicon Valley Bank, viewed as the backbone of the technology startup industry, the recent rise in bitcoin’s price has come as somewhat of a surprise.
Antoni Trenchev, the co-founder of crypto trading platform Nexo, has attributed bitcoin’s recent 50% surge in 2023 to various factors, including the aftermath of the FTX collapse, shifting interest rate trends, and the failure and subsequent recovery of SVB.
Despite this recent increase, bitcoin remained down by over 60% from its peak value of almost $69,000 in November 2021.
While the collapse of Silvergate, Signature Bank, and SVB sent shockwaves through financial markets, bitcoin’s rebound could also be fueled by those failures, according to Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno.
According to Ayyar, this past week’s events around the failure of SVB and other banks have also highlighted the power of decentralized currencies that people can own without a bank. Decentralized finance is beginning to hit home in terms of a concept to many more people now.
Bitcoin outperforms other assets
Bitcoin has experienced a significant surge of 50% in value so far this year. In contrast, the Nasdaq, closely correlated with bitcoin in the past, has only seen a 12% increase, and the S&P 500 has only risen by 2.5%.
Despite its reputation as a safe haven asset during market turbulence, gold has only increased by over 3% this year. Few other commodities or stock indexes have outperformed bitcoin, except Meta, a stock that has risen by approximately 60% this year.
Ethereum logged an increase of 42% this year compared to the USD, while solana has risen by more than 100%.
