2023-12-24 18:03:28
Despite tight macroeconomic conditions, the price of bitcoin increased by more than 160% in 2023. The growth was fueled mainly by the excitement surrounding ETF filings.
Kaiko Research, the flagship of the crypto market, will overtake most traditional instruments by the end of the year according to his prediction. Despite macroeconomic conditions and sector headwinds, the cryptocurrency is now worth over 160% more than it was at the start of this year.
There are only a few companies that have done even better than that. Among them is NVIDIA Corporation ( NVDA ), which is up 241% this year.
Bitcoin and NVIDIA exchange rate performance so far in 2023.
Kaiko’s analysis breaks down bitcoin’s price actions this year into three phases. BTC was traded between $25,000 and $30,000 almost all the time between March and October. The exchange rate then began to decline sharply, reaching multi-year lows in the middle of the year. However, following BlackRock’s spot bitcoin ETF filing on June 15, the cryptocurrency was able to rise above $40,000.
So despite a worrisome middle of the year, bitcoin ended the year as the second best performing asset. It is only preceded by semiconductor giant Nvidia, whose shares have more than tripled on the AI hype that began earlier this year.
The US Securities and Exchange Commission (SEC) is expected to make a decision on the authorization of spot bitcoin ETFs in early January. Companies waiting for their turn include Wall Street players such as Fidelity, WisdomTree, ARK, 21Shares, VanEck, among others. The approval of the investment vehicle will certainly increase the price and liquidity of bitcoin. BlackRock, for example, plans to top up its product with $10 million.
Bitcoin is once again moving against the stock market
Kaiko’s analysis also points out that bitcoin is negatively correlated with the Nasdaq 100 stock market index. According to the company, the cryptocurrency is more often referred to as a hedge against inflation, as opposed to the equally common term “digital gold”. Nevertheless, its exchange rate is greatly influenced by macroeconomic factors, the performance of the US dollar, and the trends of the stock market.
The development of the Nasdaq 100 and the exchange rate of bitcoin during this year. It can be clearly seen that the stock index typically fell during sharper increases in bitcoin.
“This trend seems to be reversing this year. The steady decline from January to July, followed by the late summer turnaround and the stalling below $30,000. The most striking inverse correlation occurred only recently when bitcoin broke through $40,000. We’ll see if this negative correlation continues, as stock indexes, including the Nasdaq 100, continue to set record highs,” Kaiko wrote.
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