Bitcoin
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The market capitalization of Bitcoin added $194 billion in 2023. Its year-to-date gains are 66% ahead of Wall Street’s major bank stocks, amid rising fears of a global banking crisis.
BTC market capitalization daily chart. Source: Trading View
Bitcoin capitalization is growing
For the first time this year, Bitcoin has managed to break away from US stocks and has gained 65% in value compared to the S&P 500’s 2.5% rise and the Nasdaq’s 15% fall this year.
Year-to-date SPX and NDAQ performance compared to BTC/USD. Source: Trading View
Meanwhile, 6 US banks – JPMorgan Chase (JPM), Bank of America (BAC), Citigroup (C), Wells Fargo (WFC), Morgan Stanley (MS) and Goldman Sachs (GS) – lost $100 billion on the market, according to CompaniesMarketCap.com.
Bank of America shares are the worst-performing Wall Street player, down 17%. Goldman Sachs by 12%, Wells Fargo (-9.75%), JP Morgan Chase (-6.5%), Citi (-3.5%), and Morgan Stanley (-1%).
Dynamics of Wall Street banks since the beginning of the year. Source: Trading View
U.S. bank valuations declined amid the ongoing collapse of the U.S. regional banking system. The crisis began to grow even more with the near-fall of First Republic Bank, which was bailed out literally at the last moment by a joint injection of $30 billion from Wells Fargo, JP Morgan Chase, Bank of America, Citigroup.
The rise of Bitcoin in the face of the growing banking crisis in the US is similar to how it reacted during the banking collapse in Cyprus and Greece.
Recall that the value of Bitcoin rose by 5000% against the backdrop of the financial crisis in Cyprus in 2013, caused by the fact that Cypriot banks were associated with real estate companies.
Dynamics of BTC/USD during the banking crisis in Cyprus. Source: Trading View
The situation was so dramatic that the Cypriot authorities had to close all banks in the spring of 2013. When Greece faced a similar crisis in 2015 and imposed capital controls on citizens, the price of Bitcoin rose by 150% over that period.
Dynamics of BTC/USD during the banking crisis in Greece. Source: Trading View
Thus, fears about the stability of the US banking system creates an appropriate environment for the growth of Bitcoin. At least for now, the cost of Bitcoin at the time of writing was $27,250. In this asset, many investors now see the most profitable asset for investment, unlike the US dollar and other fiats.
Author: Vadim Gruzdev, analyst Freedman Сlub Crypto News
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