Bitcoin, commencing the year [2023] at just under $17,000, has experienced a remarkable surge, surpassing the $44,000 mark and positioning itself as one of the top-performing assets by the end of 2023.
As of November 30 2023, the overall gain for bitcoin stands at an impressive 160%. Notably, only the stock of semiconductor giant, Nvidia, has outpaced bitcoin’s performance, boasting a gain exceeding 240% as of December 24 2023.
MILESTONE | #Bitcoin Hits $40,000 for the First Time Since April 2022
Interestingly, the world's most popular cryptocurrency has experienced a remarkable rally of over 100% in 2023, fostering optimism among many that the upward trend will persist into 2024.… pic.twitter.com/dj3LUDxdMs
— BitKE (@BitcoinKE) December 4, 2023
As outlined in an analysis conducted by the consulting firm, Kaiko Research, Bitcoin (BTC) appeared to experience a period of stagnation from March to October 2023. Moreover, the trading volumes during this timeframe did not suggest an imminent surge that would propel it to trade above $44,000, marking the first time in nearly two years it would get to this price.
Nevertheless, in the last quarter of the year [2023], pivotal events, including BlackRock’s announcement of a spot Bitcoin exchange-traded fund (ETF) and the circulation of a fake news post by Cointelegraph that the ETF application had been accepted, collectively played a role in triggering the remarkable surge of the crypto asset.
“Then [in Q4 2023], optimism about a spot BTC ETF began to grow after BlackRock filed, and then a mistaken tweet from a crypto publication stating that the ETF had been approved seemed to break the floodgates open,” the Kaiko Research said.
“Since then, BTC has rallied from $28k to nearly $45k. So, despite a somewhat boring middle of the year, BTC has one of the best Sharpe Ratios of any major assets this year, second only to semiconductor giant, Nvidia, whose stock more than doubled from January to May [2023] on AI excitement.”
According to Kaiko Research, Bitcoin performance is also decorrelating from the stock market and other macro conditions like the strength of the dollar, boosting its use as an inflation hedge.
“This trend began to reverse this year [2023], with a consistent downtrend from January to July as BTC rallied and a reversal in late summer as it stalled under $30k. The most rapid decorrelation came recently, as BTC broke $40k. It remains to be seen whether this decorrelation will continue, as equity indexes – including the Nasdaq 100 – continue to break all-time highs.”
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