Lost your password?
Don't have an account? Sign Up

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

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.