Bitcoin is already up 50% this year — beating stocks and gold
Bitcoin is up 50% so far in 2023, beating major commodities and stock indexes. Industry insiders said the bank collapses have sent investors looking for alternatives to the traditional banking system and there is also anticipation of a slowdown in interest rate rises, which is helping bitcoin.
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Bitcoin is up 50% this year despite the collapse of major crypto-focused banks, beating major stock indexes and commodities.
On Jan. 1, bitcoin began trading at just over $16,500. On Wednesday, it was hovering around the $25,000 mark, thanks to a rally that began on Sunday.
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The surge in price this year comes after bitcoin crashed 65% in 2022 after a number of major collapses of projects and hedge funds, bankruptcies, liquidity issues and the failure of FTX, one of the world’s biggest cryptocurrency exchanges.
The recent rise has come as somewhat of a surprise, given the closure of Silvergate Capital and Signature Bank, two of the biggest lenders to the crypto industry. And Silicon Valley Bank, viewed as the backbone of the technology startup industry, also failed.
“Bitcoin’s 50% surge in 2023 is a reflection of how beaten down it was post the FTX collapse, the changing interest rate outlook and the failure (& resurrection) of SVB,” Antoni Trenchev, co-founder of crypto trading platform Nexo, told CNBC.
From its peak of nearly $69,000 in November 2021, bitcoin is still down more than 60%.
Here are some of the main reasons bitcoin is up.
Bank collapses
While the collapse of Silvergate, Signature Bank and SVB sent shockwaves through financial markets, bitcoin’s rebound could also be fueled by those very failures, according to Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno.
“This past week’s events around the failure of SVB and other banks have also shone a spotlight on the power of decentralised currencies that people can fully custody and own,” Ayyar said. “Decentralised finance is beginning to hit home in terms of a concept to many more people now.”
Bitcoin is called a decentralized currency because it isn’t issued by a single entity like a central bank. Instead, it relies on an underlying technology called blockchain and its network is maintained by a community.
U.S. regulators had to step in to guarantee customer deposits at these banks, however.
Nexo’s Trenchev said the intervention “reminded investors about the structural deficiencies of the U.S. banking system and the U.S. dollar underpinning it, reasons why we’ve seen a flight to Bitcoin this week.”
Bitcoin proponents have claimed the digital currency is a way for investors to protect themselves against central bank moves, particularly quantitative easing and looser monetary policy, which they say erodes the value of fiat currency. Proponents point to bitcoin’s finite supply as a key feature of it being a store of value.
Interest rate outlook
The bank collapses came after a year of interest rate hikes from the U.S. Federal Reserve. SVB’s issue was that it had to sell off assets, mainly Treasurys, to shore up its balance sheet as depositors withdrew funds. But it sold those assets at a hefty loss because interest rate rises had pushed the price of Treasurys lower.
Some analysts have suggested the stress on the financial sector could slow down the pace of rate hikes from the Fed, which could help risk assets, such as stocks and bitcoin. That came even after Fed Chair Jerome Powell said days before the bank collapses that rates are likely to be higher than policymakers anticipated.
“In the space of a few days we’d turned from a hawkish Powell to an environment where economists were predicting the Fed might not even hike rates in March, benefiting Bitcoin,” Trenchev said.
“It’s been said that the Fed will only stop hiking rates when they break something, and now that something is broken, attention has turned to Bitcoin.”
Bitcoin vs. stocks
Bitcoin has rallied 50% this year. In contrast, the tech-heavy Nasdaq, which bitcoin has been closely correlated to in the past, is up 12% in the year to date. The S&P 500 is up 2.5%.
Gold, which is seen as an asset that investors flock to in times of market turmoil, is up just over 3% this year.
There aren’t many commodities or stock indexes that have beaten bitcoin. In terms of individual stocks, Meta is up around 60% in the year to date.
Among the major digital currencies, ether has rallied 42% this year, while solana is up more than 100%.
Meta CEO Mark Zuckerberg appears at the Meta Connect event in Menlo Park, California, on Sept. 25, 2024.
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Meta’s AI assistant now has 1 billion monthly active users across the company’s family of apps, CEO Mark Zuckerberg said Wednesday at the company’s annual shareholder meeting.
The “focus for this year is deepening the experience and making Meta AI the leading personal AI with an emphasis on personalization, voice conversations and entertainment,” Zuckerberg said.
The artificial intelligent assistant’s 1 billion milestone comes after the company in April released a standalone app for the tool.
The plan is for Meta to keep growing the product before building a business around it, Zuckerberg said on Wednesday. As Meta AI improves overtime, Zuckerberg said “there will be opportunities to either insert paid recommendations” or offer “a subscription service so that people can pay to use more compute.”
In February, CNBC reported that Meta was planning to debut a standalone Meta AI app during the second quarter and test a paid-subscription service akin to rival chat apps like OpenAI’s ChatGPT.
“It may seem kind of funny that a billion monthly actives doesn’t seem like it’s at scale for us, but that’s where we’re at,” Zuckerberg told shareholders.
During the Meta shareholder meeting, investors voted on 14 different items related to the company’s business, nine of which were shareholder proposals covering topics such as child safety, greenhouse gas emissions and a proposed bitcoin treasury assessment.
Shareholder proposal 8, for example, was submitted by JLens, which is an investment advisor and affiliate of the Anti-Defamation League, and called for Meta to prepare an annual report detailing and addressing hate content, including antisemitism, on its services following January policy changes that relaxed content-moderation guidelines.
Early voting results on Wednesday showed the proposals that Meta’s board did not recommend were unlikely to pass, including one calling for the company to end its dual-class share structure, which gives Zuckerberg significant voting power. Meanwhile, the voting items that the board favored, including those pertaining to approving the company’s board of director nominees and an equity incentive plan, were likely to pass, based on the preliminary results.
Meta said final polling results will be released within four business days on the company’s website and the U.S. Securities and Exchange Commission.
Salesforce CEO Marc Benioff participates in an interview at the World Economic Forum in Davos, Switzerland, on Jan. 22, 2025.
Chris Ratcliffe | Bloomberg | Getty Images
Salesforce shares were volatile in extended trading on Wednesday after the sales and customer service software maker reported upbeat fiscal first-quarter results and guidance.
Here’s how the company performed relative to LSEG consensus:
- Earnings per share: $2.58 adjusted vs. 2.54 expected
- Revenue: $9.83 billion vs. $9.75 billion expected
Salesforce’s revenue grew 7.6% year over year in the quarter, which ended on April 30, according to a statement. Net income of $1.54 billion, or $1.59 per share, was basically flat compared with $1.53 billion, or $1.56 per share, a year ago.
President Donald Trump announced sweeping tariffs on goods imported into the U.S. in early April. Co-founder and CEO Marc Benioff sounded positive about the company’s results for the quarter anyway, pointing to its plan, announced on Tuesday, to buy data management company Informatica for $8 billion.
It would be Salesforce’s priciest acquisition since the $27.1 billion Slack deal in 2021. Slack marked the top end of the buyouts Salesforce had made under Benioff. Activist investors raised concerns about all the spending, in addition to slowing revenue growth.
Salesforce sprung into action, slashing 10% of its headcount. Benioff proclaimed that the board’s mergers and acquisitions committee had been disbanded. The company’s finance chief at the time said it would reach a margin expansion goal two years early. And Salesforce started paying dividends to shareholders.
Initial reception to the Informatica announcement was generally favorable. “Salesforce is paying a reasonable multiple for the asset, in our view, and the deal should be more easily digested by investors than some of the company’s large deals in the past (i.e. Slack),” Stifel analysts led by J. Parker Lane wrote in a note to clients. The investment bank has a buy rating on Salesforce shares.
During the fiscal first quarter, Salesforce introduced the AgentExchange marketplace for artificial intelligence agents.
Management sees $2.76 to $2.78 in adjusted earnings per share on $10.11 billion to $10.16 billion in revenue for the fiscal second quarter. Analysts polled by LSEG had expected $2.73 in adjusted earnings per share on $10.01 billion in revenue.
Salesforce bumped up its full-year forecast. It called for $11.27 to $11.33 in adjusted earnings per share and $41.0 billion to $41.3 billion in revenue, implying revenue growth between 8% and 9%. The LSEG consensus included net income of $11.16 per share and $40.82 billion in revenue. The guidance in February was $11.09 to $11.17 in adjusted earnings per share, with $40.5 billion to $40.9 billion in revenue.
As of Wednesday’s close, the stock had slipped about 18% so far in 2025, while the S&P index was unchanged.
Executives will discuss the results with analysts on a conference call starting at 5 p.m. ET.
This is breaking news. Please check back for updates.
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