Despite a gloomy economic forecast, Bitcoin’s (BTC) 2023 momentum in an attempt to leave last year’s crypto winter has resulted in the digital asset surpassing other investment goods.
Specifically, Bitcoin has emerged as the top-performing asset class in Q1 2023, with gains of almost 70%, making it the digital currency’s strongest quarter since Q1 2021, according to Bloomberg data released on March 31, 2023.
During the first quarter of 2021, Bitcoin gained almost 103% at the beginning of the last bull run. In its most recent quarterly performance, the digital currency outperformed major benchmarks such as the S&P 500 (5.5%), Nasdaq 100 (19%), and iShares Core U.S. Aggregate Bond ETF (2.2%).
According to data received on March 31st, Bitcoin has also surpassed gold, with the precious metal reporting gains of 9.5% in the first three months of 2023, while silver’s returns remain at 0.3%.
Investors are coming to Bitcoin
In light of the quarterly gains, investors appear to be coming to Bitcoin and Ethereum (ETH), as evidenced by the nearly 400% YoY rise in open interest as of March 31. Bitcoin’s capacity to lead the market in growth has also revived excitement, with around a thousand new coins hitting the market in 2023 alone.
According to market experts, Bitcoin’s performance should not come as a surprise, since the commodity began laying the groundwork for a potential rally in late 2022.
“That comes as no surprise. All indications pointed to a strong price floor beginning in November of last year, and it was only a matter of time before either the liquidity narrative changed (which it did in early January) or longer-term investors saw a store-of-value opportunity,” said Noelle Acheson, author of the cryptocurrency book Crypto Is Macro Now.
Bitcoin’s advances have also coincided with the Federal Reserve’s efforts to rein in soaring inflation, which have revived the potential of additional interest rate hikes. With the failures of Silvergate Capital, Signature Bank, and Silicon Valley Bank, investors have viewed cryptocurrency as an alternative to centralized monetary systems. As a result, cryptocurrency has profited from the chaos in the banking sector.
Bitcoin’s endurance is due to its legitimate structural improvements and its unique function as a bearer asset in an era of distrust regarding bank deposits and growing central bank bailouts.
5 major U.S. banks lost a total of $108.92 billion in market value in 2023, while Bitcoin gained almost $219.86 billion. The report highlighted a portion of the impact of the financial crisis.
Price study of Bitcoin
Bitcoin meets resistance at $30,000 after days of gains, trading at $27,928 with daily losses of about 2.5%.
After an influx of over $200 billion in 2023, Bitcoin now commands a market valuation of over $540 billion.