Bitcoin started the year [2023] just below $17,000 and underwent a remarkable surge, surpassing the $44,000 milestone to establish itself as one of the top-performing assets by the close of 2023.
By November 30, 2023, Bitcoin had achieved an impressive overall gain of 160%. Notably, only Nvidia, the semiconductor giant, outpaced Bitcoin’s performance, boasting a gain exceeding 240% as of December 24, 2023.
An analysis by the consulting firm Kaiko Research revealed that Bitcoin (BTC) appeared to face a period of stagnation from March to October 2023.
During this time, trading volumes did not indicate an imminent surge that would propel its value above $44,000, marking the first time in almost two years it would reach such a price.
However, pivotal events in the last quarter of 2023, such as BlackRock’s announcement of a spot Bitcoin exchange-traded fund (ETF) and the circulation of a false news post by Cointelegraph claiming the ETF application had been accepted, collectively contributed to triggering the remarkable surge in the crypto asset.
“During Q4 2023, optimism about a spot BTC ETF began to grow after BlackRock filed, and a mistaken tweet from a crypto publication stating that the ETF had been approved seemed to break the floodgates open,” noted Kaiko Research. “Since then, BTC has rallied from $28k to nearly $45k. So, despite a somewhat uneventful middle of the year, BTC boasts one of the best Sharpe Ratios among major assets this year, second only to semiconductor giant Nvidia, whose stock more than doubled from January to May [2023] on AI excitement.”
Kaiko Research also pointed out that Bitcoin’s performance is becoming more independent of the stock market and macroeconomic conditions, such as the strength of the dollar, enhancing its appeal 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.”
