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%.
The Nasdaq MarketSite in New York, June 9, 2023.
Michael Nagle | Bloomberg | Getty Images
Silicon Valley executives and financiers publicly opened their wallets in support of President Donald Trump’s 2024 presidential run. The early returns in 2025 aren’t great, to say the least.
Following Trump’s sweeping tariff plan announced Wednesday, the Nasdaq suffered steep consecutive daily drops to finish 10% lower for the week, the index’s worst performance since the beginning of the Covid pandemic in 2020.
The tech industry’s leading CEO’s rushed to contribute to Trump’s inauguration in January and paraded to Washington, D.C., for the event. Since then, it’s been a slog.
The market can always turn around, but economists and investors aren’t optimistic, and concerns are building of a potential recession. The seven most valuable U.S. tech companies lost a combined $1.8 trillion in market cap in two days.
Apple slid 14% for the week, its biggest drop in more than five years. Tesla, led by top Trump adviser Elon Musk, plunged 9.2% and is now down more than 40% for the year. Musk contributed close to $300 million to help propel Trump back to the White House.
Nvidia, Meta and Amazon all suffered double-digit drops for the week. For Amazon, a ninth straight weekly decline marks its longest such losing streak since 2008.
With Wall Street selling out of risky assets on concern that widespread tariff hikes will punish the U.S. and global economy, the fallout has drifted down to the IPO market. Online lender Klarna and ticketing marketplace StubHub delayed their IPOs due to market turbulence, just weeks after filing with the Securities and Exchange Commission, and fintech company Chime is also reportedly delaying its listing.
CoreWeave, a provider of artificial intelligence infrastructure, last week became the first venture-backed company to raise more than $1 billion in a U.S. IPO since 2021. But the company slashed its offering, and trading has been very volatile in its opening days on the market. The stock plunged 12% on Friday, leaving it 17% above its offer price but below the bottom of its initial range.
“You couldn’t create a worse market and macro environment to go public,” said Phil Haslett, co-founder of EquityZen, a platform for investing in private companies. “Way too much turbulence. All flights are grounded until further notice.”
CoreWeave investor Mark Klein of SuRo Capital previously told CNBC that the company could be the first in an “IPO parade.” Now he’s backtracking.
“It appears that the IPO parade has been temporarily halted,” Klein told CNBC by email on Friday. “The current tariff situation has prompted these companies to pause and assess its impact.”
‘Cave rapidly’
During last year’s presidential campaign, prominent venture capitalists like Marc Andreessen backed Trump, expecting that his administration would usher in a boom and eliminate some of the hurdles to startup growth set up by the Biden administration. Andreessen and his partner, Ben Horowitz, said in July that their financial support of the Trump campaign was due to what they called a better “little tech agenda.”
A spokesperson for Andreessen Horowitz declined to comment.
Some techies who supported Trump in the campaign have taken to social media to defend their positions.
Venture capitalist Keith Rabois, a managing director at Khosla Ventures, posted on X on Thursday that “Trump Derangement Syndrome has morphed into Tariff Derangement Syndrome.” He said tariffs aren’t inflationary, are effective at reducing fentanyl imports, and he expects that “most other countries will cave and cave rapidly.”
That was before China’s Finance Ministry said on Friday that it will impose a 34% tariff on all goods imported from the U.S. starting on April 10.
At Sequoia Capital, which is the biggest investor in Klarna, outspoken Trump supporter Shaun Maguire, wrote on X, “The first long-term thinking President of my lifetime,” and said in a separate post that, “The price of stocks says almost nothing about the long term health of an economy.”
However, Allianz Chief Economic Advisor Mohamed El-Erian warned on Friday that Trump’s extensive raft of import tariffs are putting the U.S. economy at risk of recession.
“You’ve had a major repricing of growth prospects, with a recession in the U.S. going up to 50% probability, you’ve seen an increase in inflation expectations, up to 3.5%,” he told CNBC’s Silvia Amaro on the sidelines of the Ambrosetti Forum in Cernobbio, Italy.
Former Microsoft CEOs Bill Gates, left, and Steve Ballmer, center, pose for photos with CEO Satya Nadella during an event celebrating the 50th Anniversary of Microsoft on April 4, 2025 in Redmond, Washington.
Stephen Brashear | Getty Images
Meanwhile, executives at tech’s megacap companies were largely silent this week, and their public relations representatives declined to provide comments about their thinking.
Microsoft CEO Satya Nadella was in the awkward position on Friday of celebrating his company’s 50th anniversary at corporate headquarters in Redmond, Washington. Alongside Microsoft’s prior two CEOs, Bill Gates and Steve Ballmer, Nadella sat down with CNBC’s Andrew Ross Sorkin for a televised interview that was planned well before Trump’s tariff announcement.
When asked about the tariffs at the top of the interview, Nadella effectively dodged the question and avoided expressing his views about whether the new policies will hamper Microsoft’s business.
Ballmer, who was succeeded by Nadella in 2014, acknowledged to Sorkin that “disruption is very hard on people” and that, “as a Microsoft shareholder, this kind of thing is not good.” Ballmer and Gates are two of the 12 wealthiest people in the world thanks to their Microsoft fortunes.
C-suites may not be able to stay quiet for long, especially if the recent turmoil spills into next week.
Lise Buyer, who previously helped guide Google through its IPO and now works as an adviser to companies going public, said there’s no appetite for risk in the market under these conditions. But there is risk that staffers get jittery, and they’ll surely look to their leaders for some reassurance.
“Until markets settle out and we have the opportunity to access valuation levels, public company CEOs should work to calm potentially distressed employees,” Buyer said in an email. “And private company managements should refine plans to get by on dollars already in the treasury.”
— CNBC’s Hayden Field, Jordan Novet, Leslie Picker, Annie Palmer and Samantha Subin contributed to this report.
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