Bitcoin (BTC) price is up 50% this year outperforming stocks and gold

on Mar19
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Bitcoin is up 50% so far in 2023, beating major commodities and stock indexes. Industry insiders said the bank collapses have sent investors looking for alternatives to the traditional banking system and there is also anticipation of a slowdown in interest rate rises, which is helping bitcoin.

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

On Jan. 1, bitcoin began trading at just over $16,500. On Wednesday, it was hovering around the $25,000 mark, thanks to a rally that began on Sunday.

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The surge in price this year comes after bitcoin crashed 65% in 2022 after a number of major collapses of projects and hedge funds, bankruptcies, liquidity issues and the failure of FTX, one of the world’s biggest cryptocurrency exchanges.

The recent rise has come as somewhat of a surprise, given the closure of Silvergate Capital and Signature Bank, two of the biggest lenders to the crypto industry. And Silicon Valley Bank, viewed as the backbone of the technology startup industry, also failed.

“Bitcoin’s 50% surge in 2023 is a reflection of how beaten down it was post the FTX collapse, the changing interest rate outlook and the failure (& resurrection) of SVB,” Antoni Trenchev, co-founder of crypto trading platform Nexo, told CNBC.

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

Here are some of the main reasons bitcoin is up.

Bank collapses

While the collapse of Silvergate, Signature Bank and SVB sent shockwaves through financial markets, bitcoin’s rebound could also be fueled by those very failures, according to Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno.

“This past week’s events around the failure of SVB and other banks have also shone a spotlight on the power of decentralised currencies that people can fully custody and own,” Ayyar said. “Decentralised finance is beginning to hit home in terms of a concept to many more people now.”

Crypto rallies following SVB collapse

Interest rate outlook

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“In the space of a few days we’d turned from a hawkish Powell to an environment where economists were predicting the Fed might not even hike rates in March, benefiting Bitcoin,” Trenchev said.

“It’s been said that the Fed will only stop hiking rates when they break something, and now that something is broken, attention has turned to Bitcoin.”

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