Decentral Block Post

The market capitalization of Bitcoin (BTC) has added $194 billion in 2023. Its 66% year-to-date (YTD) growth vastly outperforms top Wall Street bank stocks, particularly as fears of a global banking crisis are rising.

BTC market cap daily performance chart. Source: TradingView

Moreover, Bitcoin has decoupled from United States stocks for the first time in a year, with its price rising about 65% versus S&P 500’s 2.5% gains and Nasdaq’s 15% decline in 2023. 

SPX and NDAQ YTD performance vs. BTC/USD. Source: TradingView 

Wall Street banks lose $100B in 2023

The six largest U.S. banks — JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Morgan Stanley and Goldman Sachs — have lost nearly $100 billion in market valuation since the year’s start, according to data gathered by CompaniesMarketCap.com.

Bank of America’s stock is the worst performer among the Wall Street banking players, with a nearly 17% YTD drop in valuation. Goldman Sachs trails with an almost 12% YTD decrease, followed by Wells Fargo (9.74%), JPMorgan Chase (6.59%), Citi (3.62%) and Morgan Stanley (0.84%).

Wall Street banks YTD performance. Source: TradingView

U.S. bank valuations have slid amid the ongoing U.S. regional banking collapse. That includes the announcement last week that Silvergate, a crypto-friendly bank, was closing its doors, followed by regulators' subsequent takeover of Signature Bank and Silicon Valley Bank.

The total crypto market capitalization increased by 26% in seven days, reaching $1.16 trillion on March 17. Bitcoin (BTC) was the biggest winner among the top 20 coins, up 31.5%, though some altcoins gained 50% or more during that period.

Total crypto market cap in USD, 12-hour. Source: TradingView

The surge in cryptocurrency prices occurred as the United States Federal Reserve was forced to lend banks $300 billion in emergency funds. According to PBS News Hour, nearly half of the money went to failed financial institutions Silicon Valley Bank and Signature Bank and was used to pay uninsured depositors. The remaining $153 billion was obtained through a long-standing program known as the "discount window," which allows banks to borrow funds for up to 90 days.

While appearing to protect the banking sector, additional funding for the Federal Deposit Insurance Corporation (FDIC) and credit facilitation using Fed resources ultimately creates a "false sense of confidence," according to activist billionaire investor Bill Ackman.

The $30 billion plan devised by U.S. regulators to avoid a major liquidity crisis in First Republic Bank (FRB) "raised more questions than it answers," said Ackman, who manages the hedge fund Pershing Square. Furthermore, Ackman stated that "half measures don't work when there is a confidence crisis."

Warren Buffett, the billionaire, is on the losing side of the bet

As the banking crisis worsened, Warren Buffett, the largest shareholder and co-founder of Berkshire Hathaway (BRKB), a $650 billion financial conglomerate, saw his holdings rapidly deteriorate. Berkshire Hathaway, for example, is the largest holder of Bank of America (BAC) stock, which has fallen 15.5% year-to-date. This position alone has cost Buffett's investment vehicle $5.2 billion.

The total crypto market capitalization increased by 26% in seven days, reaching $1.16 trillion on March 17. Bitcoin (BTC) was the biggest winner among the top 20 coins, up 31.5%, though some altcoins gained 50% or more during that period.

Total crypto market cap in USD, 12-hour. Source: TradingView

The surge in cryptocurrency prices occurred as the United States Federal Reserve was forced to lend banks $300 billion in emergency funds. According to PBS News Hour, nearly half of the money went to failed financial institutions Silicon Valley Bank and Signature Bank and was used to pay uninsured depositors. The remaining $153 billion was obtained through a long-standing program known as the "discount window," which allows banks to borrow funds for up to 90 days.

While appearing to protect the banking sector, additional funding for the Federal Deposit Insurance Corporation (FDIC) and credit facilitation using Fed resources ultimately creates a "false sense of confidence," according to activist billionaire investor Bill Ackman.

The $30 billion plan devised by U.S. regulators to avoid a major liquidity crisis in First Republic Bank (FRB) "raised more questions than it answers," said Ackman, who manages the hedge fund Pershing Square. Furthermore, Ackman stated that "half measures don't work when there is a confidence crisis."

Warren Buffett, the billionaire, is on the losing side of the bet

As the banking crisis worsened, Warren Buffett, the largest shareholder and co-founder of Berkshire Hathaway (BRKB), a $650 billion financial conglomerate, saw his holdings rapidly deteriorate. Berkshire Hathaway, for example, is the largest holder of Bank of America (BAC) stock, which has fallen 15.5% year-to-date. This position alone has cost Buffett's investment vehicle $5.2 billion.