By 2023, Bitcoin’s market cap will grow by $194 billion. Its year-to-date (YTD) growth rate of 66% has outperformed stocks of major Wall Street banks, especially as fears of a global banking crisis intensify.
Daily BTC Market Cap Performance Chart | Source: TradingView
In addition, Bitcoin, which decoupled from the U.S. stock market for the first time in a year, has seen its price rise by about 65% in 2023, while the S&P 500 rose 2.5% and the Nasdaq fell 15%.
SPX and NDAQ YTD Performance vs. BTC | Source: TradingView
Wall Street banks could lose $100 billion by 2023
The six largest U.S. banks — JPMorgan, Bank of America, Citigroup, Wells Fargo, Morgan Stanley and Goldman Sachs — have lost nearly $100 billion in market value since the start of the year, according to data compiled by CompaniesMarketCap.
Bank of America stock was the worst performer of any Wall Street bank, with its valuation down nearly 17% year-over-year. Goldman Sachs follows with a year-to-date loss of nearly 12%, followed by Wells Fargo (9.74%), JPMorgan (6.59%), Citigroup (3.62%) and Morgan Stanley (0.84%).
Year-to-date performance of Wall Street banks | Source: TradingView
Valuations in the U.S. banking sector fell amid the banking crisis. For example, crypto-friendly bank Silvergate announced its closure last week, before regulators took over Signature Bank and Silicon Valley Bank.
The ongoing crisis pushed First Republic Bank to the brink, only to be rescued at the last minute by a combined $30 billion investment from Wells Fargo, JPMorgan, Bank of America and Citigroup…
Repeating history in Cyprus and Greece?
As the U.S. banking crisis deepens, Bitcoin’s rise is similar to its response to the failure of banks in Cyprus and Greece.
During the Cyprus financial crisis in 2013, the price of BTC surged 5,000 percent as banks became overleveraged with their exposure to the regional real estate company.
BTC Performance During Cyprus Banking Crisis | Source: TradingView
The situation was so dire that in March 2013, the Cypriot authorities closed all banks to avoid a bank run.
When Greece faced a similar crisis in 2015 and imposed capital controls on its citizens to avoid a bank run, bitcoin prices surged 150%.
BTC’s performance in the Greek banking crisis | Source: TradingView
Ilan Solot, co-head of digital assets at London-based brokerage Marex, commented:
“Concerns about the stability of the banking system combined with falling real interest rates create a favorable environment for Bitcoin’s recovery. Some investors see cryptocurrencies as a hedge against systemic risk.”
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As reported by Cointelegraph