Bitcoin dominates bank stocks amid string of failures

Bank stocks are crashing, not just in the US, but around the world. Meanwhile, Bitcoin is surging.

In fact, Bitcoin (BTC) is now handily outperforming almost all of the top U.S. bank stocks so far this year, including JPMorgan Chase (JPM), Wells Fargo (WFC), and Citigroup (C).

Bitcoin is up more than 47% this year. After this morning’s mega-bank stock sell-off, JPMorgan and WFC are now in the red for 2023, down 2.2% and 6%, respectively.

The Nasdaq Bank Index — which includes dozens of U.S.-listed bank stocks — has fallen more than 20% over the same period.

All banks are down.Bitcoin is trending up | Chart by David Canellis

Admittedly, zooming out to the past year paints a slightly different story.

Since March 2022, the largest cryptocurrency by market capitalization has fallen nearly 36%. Bank stocks also fell over the same period, just not as much — banks are down 34% over the past year.

JPMorgan, the most heavily weighted in the Nasdaq banking index, is something of an outlier, up less than 3% over the past year | Chart by David Canellis

Once we hit the five-year chart, Bitcoin will once again dominate bank stocks. Since this time in 2018, BTC has risen 166% — from $9,120 to $24,245.

Top bank stocks like Discover Financial Services (DFS), Popular (POP) and JPM are also on the rise over the past five years, but by a much smaller amount — between 12.8% and 31%.

Of course, Bitcoin still has a long way to go before it can regain its all-time high set in November 2021. BTC would need to rise 185% from here to retest $69,000.

JPMorgan actually set its own intraday record a month ahead of Bitcoin: $172.96. The stock only needs to rise 31% from here to reach similar levels.

Banks, on the other hand, fell 26.4% | Chart by David Canellis

So Bitcoin is likely to be much more volatile, even with today’s crash in bank stocks.

At least today, the market seems to be leaning toward a decentralized monetary network that defies fractional reserve requirements — a clear victory in a long, dreary bear market.

Binance is not the fear of the banking industry?

There may be another reason: Binance Markets bought Bitcoin, Binance Coin (BNB) and Ether (ETH) with $1 billion in BUSD.

CEO Changpeng Zhao pointed to the move on Twitter late Sunday, saying it was due to “stablecoins and banking changes,” referring to the recent spate of crypto-friendly bank failures.

In light of stablecoin and banking changes, #Binance will switch the remaining $1 billion industry recovery plan fund from BUSD to native cryptocurrencies including #BTC, #BNB and ETH. Some money movement will happen on-chain. transparency.

— CZ 🔶 Binance (@cz_binance) March 13, 2023

“Binance’s $1 billion acquisition will definitely have an impact on prices, but probably not a driver of price increases,” said Matt Fiebach, an analyst at 0XZX Research, referring to bitcoin and ethereum in the past. The transaction volume is relatively large, reaching 50 billion US dollars in 24 hours.

David Rodriguez of 0XZX Research added that Zhao did not say when Binance would begin market buying, so any associated upward pressure could simply be market-leading Binance plans.

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Information source: compiled from BLOCKWORKS by 0x information.Copyright belongs to the author David Canellis, without permission, may not be reproduced

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