Bitcoin’s Strong Performance Attributed to Turmoil in the US Banking System by Coinbase
According to a report from Coinbase, cryptocurrency markets have shown remarkable resilience to the recent turmoil in the U.S. banking system, with Bitcoin leading the way. The report noted that since mid-February, Bitcoin has outperformed other assets, with its dominance in terms of total crypto market cap increasing to 47.7% from 43.9% in March. The outperformance coincided with the onset of the U.S. banking system turmoil in early March. The report attributed this to the fact that Bitcoin mainly exists outside of the traditional financial system, providing a hedge against current conditions. Furthermore, the cryptocurrency has benefited from investor concerns about the regulatory status of other cryptocurrencies. The report also mentioned that Bitcoin’s correlation with the S&P 500 stock index has decreased from a peak of 70% in May 2021 to 25% at the end of March. The relative outperformance of Bitcoin against other digital coins and tokens reflects investor concerns about the regulatory status of other digital assets and the thinner liquidity specific to some BTC versus stablecoin trading pairs.