A tale of two cryptocurrencies

Charles Dickens might have been describing crypto markets in 2023 when he wrote in A Tale of Two Cities: “It was the best of times, it was the worst of times”. During the course of the year, a few US banks friendly to digital assets went under, leading crypto exchange FTX was shuttered and its CEO convicted of fraud, and the CEO of another leading crypto exchange, Binance, pleaded guilty to charges of money laundering. Nevertheless, against that troubling backdrop, the Bloomberg Galaxy Bitcoin Index rose 153% in 2023 vs. 14.6% for the ICE Gold Price Index. An expected decision by the US Securities and Exchange Commission this week on the approval (or not) of one or more Bitcoin exchange trade funds could set the stage for mainstream investor interest in digital assets. While regulators are likely to still have concerns regarding crypto market transparency and liquidity, it is notable that while still elevated, Bitcoin’s volatility relative to gold has moderated from years past.

Source: Bloomberg.