What’s The Story Behind Bitcoin’s Big Gains?

After suffering some major losses last year and sustaining the collapse of FTX earlier this year, you might have been tempted to count Bitcoin out. But the leading cryptocurrency currently on the market seems to have defied the odds in a big way.

Outperforming the stock market

The S&P 500 has had a pretty decent 2023, gaining 7% in value thus far. But that’s nothing compared to Bitcoin, which has seen its price skyrocket by a whopping 65% over the same period.

Is it sustainable? That’s almost impossible to say. Nevertheless, the many so-called experts who continuously downplayed the staying power of crypto haven’t been proven right … at least not yet.

Reasons for the Bitcoin bounce

When it comes to explaining the major gains that Bitcoin has seen this year, there are a few factors to consider:

• The price plummeted last year, giving Bitcoin plenty of room to recover.
• Economic turmoil led worried investors to hedge their bets with crypto.
• Bitcoin is seen by many people as more trustworthy than other digital assets.

While the overall crypto market has seen some gains in recent months, it’s important to note that the biggest winner appears to also be the market’s biggest player.

It’s still an uncertain investment

If it had been possible to predict the future, last year would’ve been a great time to invest in Bitcoin. But just like when it was trading for a fraction of a penny in 2010, hindsight is always 20/20.

For that reason, anyone rushing out to buy Bitcoin now should be aware that anything could happen.

There aren’t many investments that come with guaranteed gains, but with an asset as young as Bitcoin, it’s still unclear how a major recession or other market forces could impact its value.

Chris Agee May 13th, 2023

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