Also, Bitcoin is decoupled from US stocks for the first time in a year, with the price up about 65% compared to the S&P 500’s 2.5% gains and the Nasdaq’s 15% decline in 2023.
Wall Street banks lose 100 billion USD in 2023
The six biggest U.S. banks — JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Morgan Stanley and Goldman Sachs — have lost nearly $100 billion in market value since the start of the year, according to data compiled by CompaniesMarketCap.com.
Bank of America’s stock is the worst performer among Wall Street bankers, with a nearly 17% decline in valuation. Goldman Sachs trails, down nearly 12% YTD, followed by Wells Fargo (9.74%), JPMorgan Chase (6.59%), Citi (3.62%) and Morgan Stanley (0.84%).
US bank valuations have fallen amid the ongoing US regional banking meltdown. That includes the announcement last week that Silvergate, a crypto-friendly bank, was closing its doors, followed by regulators’ subsequent takeovers of Signature Bank and Silicon Valley Bank.
Related: Breaking: SVB Financial Group files for Chapter 11 bankruptcy
The crisis widened further with the near-collapse of First Republic Bank, which was saved at the last minute by a combined $30 billion injection from Wells Fargo, JPMorgan Chase, Bank of America and Citigroup — among others.
Cyprus and Greece deja vu?
The emergence of Bitcoin in the face of a growing US banking crisis is similar to how it reacted during banking collapses in Cyprus and Greece.
BTC’s price grew by up to 5,000% amid Cyprus’ financial crisis in 2013, prompted by Cypriot banks’ exposure to excess regional property companies.
The situation was so serious in March 2013 that the Cypriot authorities closed all banks to avoid a bank run.
When Greece faced a similar crisis in 2015 and imposed capital controls on citizens to avoid a bank run, Bitcoin’s price increased by 150%.
“Fears about the stability of the banking system, together with falling real interest rates, create a good environment for Bitcoin to rise,” commented Ilan Solot, co-head of digital assets at London broker Marex, adding that the crypto “is seen by some investors as a hedge against systemic risks.”
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