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 mount.
Also, Bitcoin has broken away from U.S. stocks for the first time in a year, rising around 65% against the S&P 500’s 2.5% gain and the Nasdaq̵[ads1]7;s 15% decline in 2023.
Wall Street banks to lose $100 billion by 2023
The six largest US banks – JPMorgan Chase, 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.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 (9.74%), JPMorgan Chase (6.59%), Citi (3.62%) and Morgan Stanley (0.84%).
Valuations of US banks have fallen amid the ongoing US regional banking collapse. That includes the announcement last week that Silvergate, a crypto-friendly bank, was closing its doors, followed by regulators’ subsequent takeovers of Signature Bank and Silicon Valley Bank.
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 injection from Wells Fargo, JPMorgan Chase, Bank of America and Citigroup—among 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 in March 2013 that 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%.
“Fears about the stability of the banking system, together with falling real interest rates, create a good environment for Bitcoin to recover,” commented Ilan Solot, co-head of digital assets at London broker Marex, adding that the crypto “is seen by some investors as a hedge against systemic risk.”
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