Bitcoin (BTC) market cap increased by $194 billion in 2023. Its 66% year-to-date (YTD) growth has significantly outperformed Wall Street’s top bank stocks, especially as fears of a global banking crisis are mounting.
Additionally, Bitcoin has detached from U.S. stocks for the first time in a year, with its price up about 65% against a 2.5% rise in the S&P 500 and a 15% decline in the Nasdaq in 2023.
Wall Street banks will lose $100 billion in 2023
Six major US banks, JPMorgan Chase (JPM), Bank of America (BAC), Citigroup (C), Wells Fargo (WFC), Morgan Stanley (MS), Goldman Sachs (GS) lost nearly $100 billion on the market.Year-to-date valuations, according to data collected by CompaniesMarketCap.com.
Bank of America stock has been the worst performer among Wall Street bankers, with its valuation down nearly 17% year-to-date. Goldman Sachs is down almost 12% YTD, followed by Wells Fargo (-9.75%) and JP Morgan Chase (1%).
U.S. bank valuations are falling amid the ongoing collapse of U.S. regional banks. This includes last week’s announcement of the closure of crypto-focused bank Silvergate, followed by the regulator’s acquisition of signatories and Silicon Valley banks.
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The crisis escalated and nearly collapsed First Republic Bank. A total injection of $30 billion Wells Fargo, JP Morgan Chase, Bank of America, Citigroup and others.
Cyprus and Greece Déjà vu?
Bitcoin’s rise in the face of the growing US banking crisis is similar to how it reacted when banks collapsed in Cyprus and Greece.
BTC’s price rose by up to 5,000% during the 2013 Cyprus financial crisis, as Cypriot banks were exposed to overly leveraged regional real estate firms.
The situation was so dire that Cypriot authorities closed all banks in March 2013 to avoid a bank run.
When Greece faced a similar crisis in 2015 and imposed capital controls on its citizens to avoid bank runs, Bitcoin’s price rose 150% during the period.
“Concerns about the stability of the banking system and lower real interest rates create the right environment for Bitcoin to recover.” I got it Ilan Solot, co-head of digital assets at London broker Marex, added that cryptocurrencies “are seen by some investors as a hedge against systemic risk.”
This article does not contain investment advice or recommendations. All investment and trading moves involve risk and readers should conduct their own research when making decisions.
