Amid tough macroeconomic conditions, Bitcoin has gained 160% in 2023

Bitcoin has increased by more than 160% in 2023 despite challenging macroeconomic conditions and obstacles in the cryptocurrency sector, thanks in part to the enthusiasm surrounding ETF strategies.

Kaiko Research expects Bitcoin (BTC), priced at $43,159, to outperform all major traditional assets by the end of the year.Despite challenging macroeconomic conditions and obstacles in the cryptocurrency sector, the value of cryptocurrencies has increased by over 160% in 2023.

A small number of companies have outperformed Bitcoin in terms of performance. Among them is Nvidia Corp (NVDA), which has increased 241% year to date, surpassing Bitcoin’s 163% gain.

Kaiko’s analysis identifies three stages in the price behavior of BTC throughout the year. Between March and October, Bitcoin’s price bounced nearly exclusively between $25,000 and $30,000 before plunging precipitously and reaching multi-year lows in the middle of 2023. But on June 15, after BlackRock filed to create a spot Bitcoin exchange-traded fund (ETF), the price of the cryptocurrency surged past $40,000.

“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 on AI excitement.”

Upcoming SEC Decision and Impact on Bitcoin

In early January, we anticipate that the US Securities and Exchange Commission will make a final decision on approving Bitcoin spot trading through exchange-traded funds (ETFs).Major Wall Street firms such as Fidelity, WisdomTree, ARK Invest, 21Shares, and VanEck are among those awaiting permission. The investment vehicle’s certification will probably increase Bitcoin’s value and liquidity. For example, BlackRock intends to use $10 million to seed its product.

Reversal in Bitcoin’s Correlation with Nasdaq 100

Additionally, according to Kaiko’s information, there is a reversal in the relationship between Bitcoin and the Nasdaq 100 stock index. The company asserts that Bitcoin is occasionally likened to a digital form of gold, thus viewed as a hedge against inflation. However, macroeconomic variables, the strength of the US dollar, and stock market movements mostly shaped its value.

This year, the trend started to turn around, with a steady decline from January to July when Bitcoin rose, and a turnaround in the latter part of the summer when it stopped trading below $30,000. A recent event saw the fastest decorrelation when Bitcoin surpassed $40,000. As market indexes, such as the Nasdaq 100, continue to hit record highs, it is unclear if this decorrelation will stop, according to Kaiko.