Bitcoin’s Tremendous Rise and Setbacks
The year 2023 saw cryptocurrency undergo numerous setbacks, with a culminating effect of bankruptcies and lawsuits. The collapse of Silicon Valley Bank (SVB) and the FTX fallout significantly contributed to the underperformance of crypto at the beginning of 2023. However, a silver lining came in the form of Bitcoin, whose security, transparency, and rise in value from $16,000 at the start of the year to a remarkable $45,000 offered investors a game-changing opportunity.
Bitcoin Beats Gold and S&P 500
Bitcoin’s unprecedented surge in value surpassed traditional assets such as gold and major stock indices like the S&P 500. While Bitcoin saw almost triple-digit gains, gold only experienced a 14% boost, and the S&P 500 witnessed a 25% gain. This is not an isolated incident, as Bitcoin has consistently outperformed both gold and S&P 500 on various yearly timelines since its inception in 2009, except in the year 2022 when both gold and S&P 500 outperformed Bitcoin. A study paper by Plos One delves into the connection between S&P 500 and Bitcoin in higher order moments.
Bitcoin’s Performance and Market Position
Bitcoin’s 180% boost from January to December outperformed most other known assets by a significant margin. However, some individual equities, such as Coinbase and Nvidia, surpassed Bitcoin in price. The Federal Reserve’s decision to scale down interest rate hikes and the upcoming bitcoin halving set for May 2024, which occurs every four years, contributed to supporting Bitcoin’s prices.
Hot Take
As an investor, keeping an eye on Bitcoin’s market position and performance, while considering its potential as the best-decentralized exchange, remains a wise decision moving forward.
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