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The Bitcoin market has been hit hard by the 2022 bear market. Billions It was lost in the collapse of a major cryptocurrency exchange last year. But 2023 looks set to bring new investor sentiment, at least for cryptocurrencies, as the market improves.
Since the beginning of this year, market capitalization The percentage of the cryptocurrency market continued to grow as Bitcoin and Ethereum rose and lifted the overall market.
broader financial markets Optimistic Cryptocurrencies are outperforming equities in terms of returns as economic conditions improve. Will 2023 be the year of cryptocurrencies?
Crypto, gold and stocks: what happened?
according to bloombergThe MVIS CryptoCompare Digital Assets Top 100 Index returned 6%, while gold and Bloomberg Global The Large and Mid Cap Index returned just 3% over the same time frame.
Chart: Bloomberg
In 2022, loss Institutional investor confidence in the industry. However, the recent rise does not prove that cryptocurrencies are a safe bet against external market forces.
In the 2021 bull market, banking giant JP Morgan Said Bitcoin has the ability to overtake gold during this period as the asset could rise to $146,000.
However, like stocks and gold, the crypto market is vulnerable to outside market forces and industry debacles as we will see in the historic events of 2022. high-profile collapse It wiped billions of dollars out of the market.
Bitcoin and gold. Image: Moralis Academy
When Money Because it is a safe asset, its returns are more stable than stocks and cryptocurrencies.Stocks offered different levels of volatilityis a safe bet even for those with a low risk tolerance.
But with cryptocurrencies surpassing gold and stocks, more financial institutions are likely to pour capital into the cryptocurrency market, boosting returns even further.
Crypto, Stocks Facing Macro Trends
crypto and stocks more correlated More than ever, macro trends will affect both stock and crypto markets. Predict If US stocks fall this week, crypto market returns could emulate or slightly outperform the stock market.
BTC total market cap at $331 billion on the daily chart | Chart: TradingView.com
The release of this week’s consumer price index data will have implications for the financial markets as a whole.Currently, the US Federal Reserve interest rate is 4.5%The release of last month’s CPI data will determine whether the central bank raises or eases interest rates.
If economic conditions improve, cryptocurrencies could continue to outperform equities, as in the 2021 bull market.
– Featured image by Spencer Lewis
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