Bitcoin market cap to grow 60% in 2023 as top Wall Street banks lose $100 billion
The market cap of Bitcoin (BTC) has added $194 billion by 2023. Its 66% year-to-date (YTD) growth is outpacing the top Wall Street banking stocks, especially as fears of a global banking crisis rise.
Also, Bitcoin has decoupled from US stocks for the first time in a year, with its price rising around 65% against the S&P 500’s 2.5% gain and the Nasdaq’s 15% decline in 2023.
Wall Street banks to lose $100 billion by 2023
The six largest US banks – JPMorgan Chase ( JPM ), Bank of America ( BAC ), Citigroup ( C ), Wells Fargo ( WFC ), Morgan Stanley ( MS ) and Goldman Sachs ( GS ) – have lost nearly $100 billion in the market valuation since the start of the year, according to data collected by CompaniesMarketCap.com.
Bank of America’s stock is the worst performer among banking players on Wall Street, with a nearly 17% decline in valuation. Goldman Sachs follows with a decline of nearly 12% YTD, followed by Wells Fargo (-9.75%), JP Morgan Chase (<6.5%), Citi (<3,5 %) og Morgan Stanley (>1%).
US bank valuations have fallen amid the ongoing US regional banking collapse. That includes the announcement last week that Silvergate, a crypto-focused bank, was closing its doors and the subsequent takeover of Signature Bank and Silicon Valley Bank by regulators.
Related: Breaking: SVB Financial Group files for Chapter 11 bankruptcy
The crisis widened further with the near-collapse of First Republic Bank, which was saved at the last minute by a combined $30 billion infusion from Wells Fargo, JP Morgan Chase, Bank of America, Citigroup and others.
Cyprus and Greece deja vu?
The rise of Bitcoin in the face of a growing US banking crisis is similar to how it reacted during banking collapses in Cyprus and Greece.
BTC’s price grew by up to 5,000% amid the Cyprus financial crisis of 2013, prompted by the exposure of Cypriot banks to overburdened regional real estate companies.
The situation was so serious 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’s price rose by 150% during the period.
“Fears about the stability of the banking system, along with falling real interest rates, create a good environment for Bitcoin to recover,” noted Ilan Solot, co-head of digital assets at London broker Marex, adding that the crypto “is being seen by some investors as a hedge against systemic risk.”
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
