Crypto Has Shined During Banking Turmoil
Is buying cryptocurrencies a good strategy during times of crisis?
The idea may seem far-fetched, particularly because cryptocurrencies are themselves no strangers to the crisis.
Tweet on crypto market
Crypto Has Shined During Banking Turmoil
Bitcoin has jumped about 27% since March 8, when Silicon Valley Bank announced a loss and a planned capital raise that ultimately led to a bank run.
Ether jumped 13% during that period.#BTC #banking #Ether pic.twitter.com/GRABWAst9n
— The_Journalbiz (@the_journalbiz) March 21, 2023
Factset chart on crypto
But bitcoin and ether, two of the best-known cryptocurrencies, have significantly outperformed stock markets since the banking turmoil started.
Bitcoin has jumped about 27% since March 8, when Silicon Valley Bank announced a loss and a planned capital raise that ultimately led to a bank run. Ether jumped 13% during that period.
However, stock markets have done much worse. Through Monday’s close:
- The S&P 500 has slipped 1%
- Dow Jones Industrial Average is down 1.7%
- the Nasdaq Composite is just 0.9% higher
In recent market action Tuesday, bitcoin stood at $28,044, little changed from its late-Monday level, according to CoinDesk.
“When there has been a banking crisis and deposits are at risk, bitcoin has tended to perform exceptionally well,” wrote Markus Thielen, head of research and strategy at crypto platform Matrixport, in a report on Tuesday.
