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| Bitcoin Surpasses 50% Year-to-Date Gain Despite Crypto Lender and Exchange Closures |
Despite the recent collapse of several high-profile crypto-focused lenders and exchanges, the price of Bitcoin (BTC) has surged by 50% this year. On January 1, 2023, Bitcoin was trading at $16,500 U.S. Today, the largest cryptocurrency by market capitalization is hovering around $25,000 U.S., outperforming both stocks and commodities like gold. The current year-to-date rally of Bitcoin is trouncing the tech-laden Nasdaq index, which is up 12% so far in 2023, while the benchmark S&P 500 index is up 2.5%.
Investors have been seeking refuge in Bitcoin, which is viewed as a relatively stable investment despite ongoing volatility in equity markets. The most recent rally comes despite the closures of Silvergate Capital (SI) and Signature Bank (SBNY), two of the largest lenders to the cryptocurrency sector. However, it should be noted that Bitcoin’s price remains 60% lower than its all-time high of nearly $69,000 U.S. reached in November 2021.
Experts predict that Bitcoin could continue to rise in the coming months as more companies adopt it as a form of payment, and institutional investors increasingly view it as a hedge against inflation. The acceptance of Bitcoin by large corporations such as Tesla and PayPal has boosted the cryptocurrency’s legitimacy in the eyes of many investors. Nevertheless, caution is advised as cryptocurrency remains highly speculative, and investors should only invest what they can afford to lose.
