Bitcoin’s Volatility Should Burn Investors. It Hasn’t

Wild price swings normally have a way of reversing fortunes. So how do you explain when they don’t? Bitcoin’s Volatility Should Burn Investors. It Hasn’t

Just over 10 years old, Bitcoin might already be the best-performing investment of all time. It might also be the most volatile, and volatility has a way of luring people into ill-timed and costly investing choices. So with all the headlines about Bitcoin’s meteoric rise, it seems reasonable to ask how its investors are doing.

There’s no denying Bitcoin’s astonishing success. Its price has grown a stupefying 796,933 times since 2010. For perspective, the Dow Jones Industrial Average has grown 869 times since its inception in 1896. That means Bitcoin’s price appreciation has been 917 times that of the Dow in less than a tenth of the time.

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With a surge like that, it doesn’t take a big investment to make a pile of money. A measly $100 bet on Bitcoin on Day One, or close to it, would have blossomed into close to $80 million. And investors didn’t have to be there from the beginning to rack up big gains. They just had to hop on somewhere along the line and hang on to their coins.

The trouble is, Bitcoin’s wild swings don’t make it easy to hold on. Its volatility, as measured by annualized standard deviation, has clocked more than 200% since 2010, or close to 15 times that of the S&P 500 Index during the same period. Investors who were in and out of Bitcoin had as much opportunity to lose a fortune as make one.

Investments with far less volatility than Bitcoin have been known to trip up investors. Faced with big and unpredictable price moves, those who have trouble staying in their seat are more likely to buy on the way up and sell on the way down rather than the other way around.

Morningstar’s annual “Mind the Gap” report attempts to quantify the impact of investors’ behavior on their investment returns by measuring the so-called behavior gap, or the difference between the performance reported by investment funds and the returns investors in those funds manage to capture. The results strongly suggest that more volatility leads to bigger gaps, and not in investors’ favor.

While gaps can be caused by numerous factors, volatility seems to be a key one. According to the latest report, investors have fared best in allocation funds, or those that combine stocks, bonds and other investments.

The gap in those funds was 0.4% a year over 10 years through 2019, meaning that on average investors captured a higher return than the one reported by their funds.

One reason, as Morningstar puts it, is that “by virtue of their diversified approach, allocation funds tend to have more-stable performance and are easier to own than funds that are subject to more-dramatic performance swings.”

By contrast, investors in sector-specific stock funds, which tend to be more erratic, gave back 1.35% a year, the widest gap in either direction.

If volatility is inversely related to the behavior gap, then Bitcoin’s gap should be alarmingly negative. It’s difficult to track the money flowing in and out of Bitcoin, which is part of the charm, so it’s hard to be sure. But the available numbers suggest just the opposite — investors appear to have deftly navigated its harrowing highs and lows, buying on the way down and selling on the way up.

Bitcoin has already been through two spectacular boom-bust cycles. It surged to a high of $1,137 from just $0.08 from July 2010 to November 2013, and then tumbled 84% to $183 by January 2015. It happened again three years later.

Bitcoin peaked at more than $19,000 in December 2017 and then plunged 83% over the next year, landing at about $3,100 in December 2018.

Here’s the surprising part: According to CryptoQuant, a cryptocurrency data provider that attempts to gauge Bitcoin’s flows on top cryptocurrency exchanges, there have also been two swells in net flows to Bitcoin.

Based on rolling one-year flows since April 2012, the longest period available, those two swells align almost perfectly with the timing of Bitcoin’s two busts.

During the first washout, Bitcoin was still a novelty, so a few whales — lingo for investors who own a lot of Bitcoin — may have had a disproportionate impact on flows. But by the second one, Bitcoin was more widely owned, so the flows represent a broader cross section of investors.

Either way, investors shoveled more money into Bitcoin on the way down than up, and it’s not even close. Investors poured a net $8.5 billion into Bitcoin during the two busts, and they pulled a net $3.2 billion the rest of the time.. If Bitcoin has a behavior gap, it’s more likely positive than negative — and it might even be hugely positive, as far as gaps go.

Is it possible that Bitcoin enthusiasts are a more evolved species of investors who can exploit its terrifying volatility rather than get mauled by it? Here’s another reason to think so: One-year net flows to Bitcoin turned negative for the first time last June and have declined sharply ever since.

In fact, net outflows were the highest ever during the last 12 months through January, even as Bitcoin has soared to new heights. Rather than chase Bitcoin higher, investors appear to be running for the exit.

Granted, it’s still early days for Bitcoin, and a third bust could change everything. But as of now, Bitcoin’s investors may be even more incredible than the digital coin itself.

Updated: 2-17-2021

Bitcoin Volatility Lower Than 2017 Levels As Price Smashes $51K

Bitcoin volatility is not at the same level seen during the 2017 bull run, but analysts still say lower price swings are necessary to maintain upward momentum.

Bitcoin (BTC) has hit a new high above $51,300 in a continuation of its bullish advance that begun in October 2020.

According to Bloomberg, the current run is different from the 2017 bull rally that topped out below $20,000 in terms of volatility.

Indeed, data from Woobull Charts puts Bitcoin’s 60-day volatility at 14.25%, a significant decline from the over 32% recorded at the zenith of the 2017 bull run.

However, in terms of realized volatility, Bitcoin’s price swings are still orders of magnitude higher than gold. Data from crypto analytics provider Skew puts Bitcoin’s current three-month realized volatility at 90% — more than five times the actual price move for gold, as reported by JPMorgan Chase analysts.

In a note to investors, JPMorgan Chase analysts argued that Bitcoin’s current price rally is unsustainable unless volatility decreases significantly.

Part of this assessment likely comes from the rollercoaster January where BTC rallied 46% to almost reach $42,000 before declining over 30% to fall below the $30,000 price mark.

For Bloomberg strategist Mike McGlone, the current Bitcoin price swings are only temporary, with the market expected to calm down. According to McGlone, the growing institutional BTC adoption will force Bitcoin’s volatility below even that of gold.

Tesla recently announced a $1.5-billion Bitcoin purchase, while business intelligence firm MicroStrategy continues to expand its BTC ownership.

Earlier in February, U.S. crypto exchange Kraken issued a report predicting that Bitcoin’s continued upward advance will be accompanied by reduced volatility.

According to Peter Brandt, Bitcoin is in yet another parabolic advance, with the largest crypto by market capitalization printing about 75% in year-to-date gains thus far.

Updated: 3-13-2023

Bitcoin’s Store of Value Narrative Is On Full Display; Crypto Prices Stay Green

Bitcoin, as BitMEX co-founder Arthur Hayes correctly predicted, is on a rally, up nearly 8.5% in the last 24 hours, leaving other cryptocurrencies in its digital dust.

“Bitcoin is rallying as financial stability risks sent Treasury yields crashing. In a scramble to avoid another massive bank run, federal regulators stepped in as some Americans grew skeptical of traditional banking,” Edward Moya, senior market analyst at Oanda, told CoinDesk via email.

“Bitcoin volatility should remain elevated and it will be interesting to see how much momentum will be left with today’s surge.”

Will Small Banks Fill the Crypto Gap?

The crypto ecosystem was built on the belief that no one entity, meaning a bank, should be in charge of one individual’s finances.

Until that becomes a reality, traditional banking will likely have to serve as a bridge between centralized finance and decentralized finance.

Thus, the shutdown of Silvergate Bank, Silicon Valley Bank (SVB) and Signature Bank will certainly cause headaches for the industry in the short-term as many crypto companies search for new banking partners, uncertain if larger entities will even want to touch crypto companies anytime soon.

“For now, it’s not clear what new financial institutions will partner with these crypto companies in the wake of Silvergate, SVB and now Signature,” said Ilya Volkov, CEO of and co-founder of YouHodler, a Swiss-based international fintech platform providing a variety of Web3 crypto and fiat service.

“The industry is currently running out of options and that needs to be addressed soon to prevent further problems,” Volkov added, noting that it will cause some fear-based reactions from the investors.

In the long run, however, this contagion shouldn’t hurt the crypto industry as there will likely be other smaller banks that will likely bridge the gap.

“Crypto liquidity is likely to take a hit in the short term, but this is an opportunity for new innovative challenger banks to step up and take the place of SVB, Silvergate and Signature,” said Andrei Grachev, managing partner at digital asset market maker DWF Labs.

Updated: 3-14-2023

Bitcoin Hits 9-Month High

The latest price moves in crypto markets in context for March 14, 2023.

Bitcoin continued to rally early Tuesday, building on Monday’s gains, with an 18% increase over the past 24 hours. The world’s largest cryptocurrency broke the $25,000 mark following the release of U.S. inflation data.

The cryptocurrency has since reached around $26,200, a nine-month high.

Over $100 million worth of bitcoin shorts, or bets against a rise in prices, were liquidated on Monday.

Updated: 3-17-2023

Bitcoin Price Hits $27K In New 9-Month High As Fed Injects $300B

Bitcoin bulls attempt to break higher as Fed liquidity upends quantitative tightening in place since 2021.

Banking Crisis Volatility Sees $27,000 BTC Price

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hitting $27,025 on Bitstamp before consolidating.

At the time of writing, the pair circled $26,500 with volatility ongoing after the Wall Street open.

A catalyst for fresh upside had come in the form of the Federal Reserve’s balance sheet data overnight, this showing almost $300 billion being injected into the economy as part of the banking crisis response.

The event effectively undid months of liquidity removal under the Fed’s quantitative tightening (QT), and commentators were quick to call the restarting of the opposite phenomenon — quantitative easing (QE).

“They’ll tell you it’s not QE, but the numbers don’t lie. Roughly half of the reduction from a year of quantitative tightening has been erased in a week,” trader, analyst and podcast host Scott Melker, known as “The Wolf Of All Streets,” commented.

Bitcoin thus followed a strong performance for U.S. equities the day prior.

For market commentators, belief was there that the uptrend could continue despite stocks producing sideways action on the day.

“Bitcoin is trying to fly — this resistance line will break sooner or later,” popular analytics resource Stockmoney Lizards summarized about a chart showing a rising resistance trend line for BTC/USD.

Cointelegraph contributor Michaël van de Poppe, founder and CEO of trading firm Eight, eyed specific levels up and down.

“Chopperino land on Bitcoin, which means that we’ll probably have some sideways structures,” he told followers on the day.

“Needs to hold $26K. If that holds, $28–30K is next. If it loses $26K, I’m punting around $25K for some longs. Relatively easy to understand.”

Hayes: I’m Ditching Stocks For Crypto

In his latest markets blog post, meanwhile, Arthur Hayes, former CEO of derivatives giant BitMEX, revealed a pivot of his own.

In an extensive dissection of current Fed behavior and its potential consequences, Hayes concluded that Bitcoin was a firm haven — in contrast to stocks.

“For me and my portfolio, I’m largely done trading stonks. What’s the point? I generally buy and hold and don’t trade around my positions that frequently. If I believe what I wrote, then I am signing myself up for underperformance,” he revealed.

“If there is a short-term trading opportunity where I think I can earn some quick fiat duckets and then take my profit and buy more Bitcoin, I will do it. Otherwise, I am liquidating most of my stock portfolio and moving it into crypto.”

Hayes added that there was always a chance that he could be wrong about Bitcoin’s “upward trajectory” and that adjustments to his strategy would follow should that be the case.

“The end was always known in advance. YCC is dead, long live BTFP!” he concluded, referring to the Fed’s Bank Term Funding Program (BTFP) being a disguised form of Yield Curve Control (YCC) “repackaged in a new, shiny, more palatable format.”

Crypto Market Cap Reclaims $1T, And Derivatives Point To Further Upside

Bitcoin’s performance has outpaced Warren Buffett’s Berkshire Hathaway over the past six months, with crypto markets appearing to have turned a corner.

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

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 NewsHour, 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 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 “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 crisis of confidence.”

Billionaire Warren Buffett Is On The Losing Side Of The Bet

As the banking crisis worsened, Warren Buffett, the co-founder and largest shareholder of Berkshire Hathaway — a $650 billion financial conglomerate — saw his holdings rapidly deteriorate.

Berkshire Hathaway, for example, is the largest holder of Bank of America stock, which has fallen 15.5% year-to-date. This position alone has cost Buffett’s investment vehicle $5.2 billion.

Buffett, a well-known cryptocurrency critic, has stated that he has no interest in Bitcoin, even if the entire float is offered at $1,300. The 91-year-old, with a net worth of around $102 billion, claimed that Bitcoin doesn’t produce anything whereas farmland and residential real estate do.

However, Bitcoin’s price increased by 31.5% in the six months preceding March 17, while Berkshire’s stock increased by 5.8%.

So, for the time being, the so-called “rat poison” — as Buffett once described Bitcoin — is outpacing his own financial management firm.

Bitcoin Is Beating Warren Buffett’s ‘Crypto Bet’ In 2023

Bitcoin’s Volatility Should Burn Investors. It Hasn’t

Bitcoin’s rebound in 2023 has also seen Coinbase stock gaining over 100% year-to-date, boosting Cathie Wood’s ARK portfolio.

In 2023, Bitcoin and Cathie Wood’s Coinbase investment are finally outperforming Warren Buffett’s popular “crypto bet” in Brazil’s fintech giant Nubank.

Bitcoin vs. Crypto-Exposure Stocks NU And COIN

As of March 17, Bitcoin’s price is up nearly 55% year-to-date (YTD). In comparison, Nubank — trading as NU — has risen only 26%. Meanwhile, another crypto-exposure stock, Coinbase — trading as COIN — has seen the biggest rebound of the three, rising over 100% YTD.

Nevertheless, Buffett’s investment has fared better than COIN over the past 12 months.

As of March 17, NU is down 38% year-over-year compared with COIN’s 61.76%, nearly equal to Bitcoin’s 37% losses in the same period.

Warren Buffett Sticks By His Neobank Investment

Buffett’s investment firm, Berkshire Hathaway, purchased $1.5 billion worth of class-A Nubank stock in two separate rounds in July 2021 and February 2022.

The news came as a surprise to many, as Buffett is a well-known cryptocurrency critic and Nubank offers crypto trading services via its Nucripto wing. In May 2022, the bank said that it would allocate 1% of its net assets to Bitcoin.

“This move reinforces the company’s conviction in Bitcoin’s current and future potential in disrupting financial services in the region,” Nubank said at the time.

But despite Nubank’s crypto exposure and NU’s price decline, Buffett has not sold a single share, according to Berkshire’s latest annual earnings report.

The decision to keep holding NU through a rough market likely coincides with Nubank’s growth in the Latin American banking sector.

Nu Holdings, the parent company of Nubank, reported a solid 2022 with 140% year-on-year growth in revenue and a 38% year-over-year rise in active customers.

Cathie Wood Doubles Down On COIN In 2023

The same cannot be said about Coinbase’s earnings in 2022 with its 57% drop in year-over-year revenue.

But ARK Invest CEO Cathie Wood appears unfazed and is continuing to buy COIN shares via her ARK Next Generation Internet ETF (ARKW) and ARK Innovation ETF (ARKK) in 2023. The COIN buys, in particular, account for roughly 30% of all the stock purchased so far this year.

As a result, Coinbase has become Wood’s fifth-largest holding on record, worth nearly $670 million at the time of writing.

Holding Bitcoin A Better Strategy?

Comparing Bitcoin’s price performance with the market debut of Coinbase and Nu Holdings reaffirms that BTC not only regularly outperforms stocks in general but also crypto-exposure stocks — although exceptions have been seen, such as with the Bitcoin mining stock boom in 2021.

But overall, holding Bitcoin is proving to be a better strategy year-over-year, and likely with more upside potential, than traditional stocks.

Notably, NU has dropped by more than 50% since its market debut in December 2021. Since then, BTC has fared better with a 44% decline in the same period.

Similarly, COIN is down 80% since its initial public offering in April 2021. The same down-cycle, however, has seen Bitcoin only losing around 50%, emerging as a better performer overall against crypto-exposure stocks such as Coinbase and Nu Holdings.

Threats To Crypto Have Never Been Greater, But Mass Adoption Is Imminent

What does the future for crypto bring amid 2023’s convergence of events, challenges and opportunities?

Mt.Gox Pepayments

The second supply increase that could impact the market pertains to Bitcoin’s upcoming release of coins recovered from the infamous Mt. Gox hack of 2014. At that time, Mt. Gox was a leading Bitcoin exchange, accounting for 70% of the global crypto trading volume.

However, in February 2014, a tragic hack resulted in the loss of over 850,000 Bitcoins, causing widespread shock throughout the crypto communities and ultimately leading to the closure of the exchange.

Since the hack, former Mt. Gox holders have been in a prolonged legal battle to retrieve their funds. Fortunately, this drawn-out saga is set to come to a close in September, with the coins being returned to the claimants.

Surprisingly, the largest holders of the recovered Bitcoins are institutional funds that purchased Mt. Gox claims for a fraction of their value from retail investors.

Despite the ongoing legal battle, one of the largest holders has stated that they intend to hold onto their Bitcoin, which has eased concerns of a massive sell-off of trustee Bitcoin.

Nevertheless, once claimants receive their Bitcoin, there might still be some fear, uncertainty and doubt that persist and introduce some volatility into the market.

Challenging Global Macro Environment

Crypto used to exist in its own bubble, independent of macroeconomic events in traditional finance. However, over the years, the crypto market has become increasingly intertwined with traditional finance and is proving to be significantly influenced by wider economic conditions.

Factors including inflation, the Dollar Index, VIX, FOMC meetings and bond yields are some of the major determinants that dictate the price direction of crypto and its volatility.

A recent example of this would be the failure of Silicon Valley Bank (SVB), whose overexposure to long-term government bonds played a key role in its downfall, triggering a bank run due to interest rate hikes as well as deteriorating economic conditions.

Shortly following this event, Circle, the issuer of the USDC stablecoin, confirmed that a portion of the reserves backing USDC — worth $3.3 billion or 7% of the total — were held in the failed bank.

This news triggered a wave of panic-selling among USDC holders, causing the stablecoin to lose its $1 peg and plummet to $0.87 on the morning of March 11.

Even Dai, the decentralized algorithmic stablecoin, was affected, as 40% of its reserves are backed by USDC.

Undoubtedly, the current regulatory landscape and failing banks are presenting significant obstacles to the movement of capital in and out of the crypto world.

This may result in 2023 becoming the year that crypto becomes increasingly unbanked, with regulatory pressures causing uncertainty around the future of stablecoins such as USDC and BUSD.

Banks are making it increasingly challenging for people to purchase crypto, with U.K. high street bank Nationwide announcing in February that it will be imposing daily purchase limits and the banning of purchasing crypto using credit cards.

Natwest also updated its limits. Besides that, Binance announced the suspension of GBP deposits and withdrawals via bank transfers and faster payments, as its fiat partner Skrill Limited will stop offering banking services to the exchange.

These restrictions could lead to a poor user experience for those seeking to acquire crypto assets as well as further increasing risk for consumers in the process.

Final Thoughts

The current macro and regulatory overhang coupled with limited capital inflow suggests that 2023 will likely not see a significant surge in new crypto users for transactional services.

Relying on buzzwords such as account abstraction, Layer-2 blockchain wars and ZK-rollups will not be enough to drive immediate adoption.

Though, at the end of the day, the responsibility lies in the hands of builders and true believers to rebuild the ecosystem from the ground up, for which these are useful new tools.

The recent eventful weekend of March 11, when SVB collapsed, could be a significant moment that highlights the diminishing trust in not only governments but more importantly, the traditional financial system.

This could be the seminal moment that might urge everyday users to look for alternatives, and the crypto industry needs to ensure that it is ready to offer stability and security for its assets.

Bitcoin Is Benefiting From Crypto’s Flight To Quality: Matrixport

Bitcoin’s Volatility Should Burn Investors. It Hasn’t

Investors are shifting into the cryptocurrency from stablecoins and more volatile cryptocurrencies, a report from the firm said.

Bitcoin (BTC) is benefiting from instability in the financial system, falling inflation that allows the Federal Reserve to become less hawkish and a regulatory overhang that has hit stablecoins, crypto-services provider Matrixport said in a report Thursday.

“As those three trends persist, bitcoin prices can stay high and continue to rally,” Markus Thielen, head of research at Matrixport, wrote in the note.

“Investors have now woken up,” Thielen said, noting that the Fed’s interest-rate policy has severely damaged some investment portfolios and threatened the financial stability of the economy.

Several flights to quality are happening at the same time, Thielen’s note said.

Traders and investors have shifted from higher beta – or more volatile – cryptocurrencies into bitcoin alongside a transition from stablecoins, which are less volatile.

When Paxos Trust’s binance USD (BUSD) encountered regulatory scrutiny, money moved from BUSD to BTC, and when Circle Internet Financial’s USD coin (USDC) lost its peg, money flowed from USDC.

A stablecoin is a type of cryptocurrency whose value is pegged to another asset, usually the U.S. dollar.

In addition, the Fed’s policy of raising rates has led to falling prices of Treasurys, lowering the value of banks’ portfolios. The collapse of Silvergate Bank, Silicon Valley Bank and Signature Bank (SBNY) has roiled financial markets this month.

The potential classification of some digital assets as securities has also become an overhang for many cryptocurrencies, the note added.

“While there appears to be a clear path to regulation, there is a specific understanding that some can escape regulation,” the report said, noting that regulators and central banks have classified bitcoin as a commodity, not a security.

Updated: 3-17-2023

Bitcoin Believers Revel In Told-You-So Moment, Big Rally As Banks Crumble

* Oldest Cryptocurrency’s Origin Story Re-Emerges With Big Rally
* Bank Runs Are ‘As Perfect A Bitcoin Use-Case As One Can Think’

As members of the media lingered near the entrance of the headquarters of Silicon Valley Bank this week, a Bitcoin true believer seized on an opportunity.

He drove a Budget moving van directly in front of the building’s entrance, so all could see the message plastered on the side: “BE YOUR OWN BANK,” it read, between a doctored image of Federal Reserve Chair Jerome Powell holding a “Buy Bitcoin” sign and the orange logo for the original cryptocurrency.

A video of the made-for-social-media stunt, set to Pink Floyd’s “Money” as soundtrack, was tweeted by an account with the handle @cryptograffiti, with text that said “btc>svb.”

Following an epically awful 12 months for the cryptocurrency industry, Bitcoin evangelists are enjoying a moment — not to mention a huge rally in their favorite coin, which has soared more than 30% in the past seven days, putting the key level of $30,000 in sight.

To them, the reverberations from the failure of Silicon Valley Bank only serve to underscore a key vulnerability in the fractional-reserve banking system that Bitcoin was meant to fix: It’s all based on faith that your money will be there when you need it.

As the original white paper proposing Bitcoin put it in the wake of the global financial crisis, the traditional system works well most of the time yet “it still suffers from the inherent weaknesses of the trust-based model.” That weakness went ignored by many in the era of low interest rates, but it’s front and center again now.

#Bitcoin ad on display in front of Silicon Valley Bank HQ. pic.twitter.com/SRNuv84GDf

— Watcher.Guru (@WatcherGuru) March 15, 2023

“An environment where higher interest rates after a period of hyper-low interest rates are creating bank runs is about as perfect a Bitcoin use-case as one can think,” said Stephane Ouellette, chief executive of FRNT Financial Inc.

It’s true that in the wake of last year’s series of crypto blowups, including the implosion of digital-asset exchange FTX and all the dominos in the crypto-lending space that fell after it, trust in the intermediaries of the digital-asset market is arguably as low, if not lower, than faith in regional banks.

Yet nothing at all changed about the rules dictating the growth of Bitcoin supply, a stark contrast to the improvisational and hard-to-predict responses from central banks and governments to the turmoil in traditional banking.

The FUD — short for fear, uncertainty and doubt that had long been targeted at crypto by traditional finance — is running in the opposite direction now.

Yet while the resurfacing of Bitcoin’s origin story has given true believers a “told ya so” moment, it’s not necessarily what drove the coin’s price up during the recent banking chaos.

Many in the market believe crypto is rallying not because of fear triggered by the crisis itself, but rather the aggressive response from the government and Federal Reserve that has seen hundreds of billions of dollars added to, or pledged to, the banking system and dramatically shifted the outlook for interest rates.

In other words, to use the technical jargon preferred by cryptocurrency market practitioners: “money printer go brr.”

Game Blouses.

Get ready for a face ripping rally in risk assets.

MONEY PRINTER GO BRRR!!! pic.twitter.com/r1JJBDsZOr

— Arthur Hayes (@CryptoHayes) March 12, 2023

In other words, to use the technical jargon preferred by cryptocurrency market practitioners: “money printer go brr.”

“Given the uncertainty, we are not yet seeing mass retail or institutional inflows into the market,” said Noelle Acheson, author of the “Crypto Is Macro Now” newsletter. “What is moving the market is the shifting liquidity environment,” she said, and that “expectations are consolidating around a much lower rate-hike ceiling than expected even a week ago.

That environment is good for risk assets, and especially Bitcoin which has no earnings or credit vulnerability.”

That relative simplicity of Bitcoin also sets it apart from the more-ambitious crypto projects that followed it and unleashed so much chaos last year.

Its “proof-of-work” model, in which miners perform complicated computing tasks as a way to preserve the integrity of the blockchain, stands in stark contrast to “proof of stake” networks which pay yields to holders willing to lock up their coins — a model that Securities and Exchange Commission Chair Gary Gensler has said should be regulated like securities.

And newer crypto projects have shown a dependence on the very banking system that Bitcoin aimed to circumvent, which has ratcheted up tensions between the old guard and the new.

A heavy reliance on crypto clients contributed to the downfall of two other banks this month, Silvergate Capital Corp. and Signature Bank.

Now the Blockchain Association trade group says it’s digging into allegations that digital-asset firms are being booted from the US banking system, and questions whether actions by regulators actually contributed to the recent bank failures.

Not to mention, the firehose of venture capital that once pointed in the direction of new digital-asset projects has slowed to a trickle.

Even before this month’s financial drama, investments by VC firms into crypto startups had already plunged by 75% year-over-year to $2.3 billion in the fourth quarter, according to PitchBook.

The current environment all adds up to what Ryan Watkins, co-founder of Syncracy Capital, has called a “back to basics” moment for crypto.

We continue to be in a “back to basics” moment for the cryptoeconomy — expect dominance to continue its ascent.

BTC has led the way as the outside money narrative accelerates and Ordinals reinvigorate Bitcoin blockspace.

Expect ETH will be in better shape following Shanghai. https://t.co/8kLqCqCuhV pic.twitter.com/Kgu3zqi1Mb

— Ryan Watkins (@RyanWatkins_) March 17, 2023

Not surprisingly, the many critics and skeptics of crypto remain unconvinced. After all, the past week’s rally could disappear in a flash, given the notorious volatility of Bitcoin.

To Rob Arnott, a pioneer of quantitative investing and founder of Research Affiliates, Bitcoin remains useless in what he calls the three main purposes of money: as a medium of exchange, a measure of value, and a store of value over time.

Still, he admits to being a bit sympathetic to the motivations of the laser-eye crowd.

“Count me as a skeptic, but one who thinks the aspirational goals of crypto are a wonderful thing because central bankers are generally shockingly clueless,” he said.

On that note, he doesn’t sound too much different than Cryptograffiti, the artist who drove the moving truck to the front of SVB’s headquarters.

“Our current, broken financial system is Bitcoin’s best marketing and the Fed is its ad agency,” the anonymous artist told Bloomberg, declining to give his real name out of privacy concerns. “We need a Plan B. For me and an increasing number of individuals, Bitcoin is the answer.”

Bitcoin Is A Clear Winner Of The U.S. Banking Crisis

The narratives around bank failures, stablecoins and interest rate hikes seem strong enough to propel the price of bitcoin, says CoinDesk’s George Kaloudis.

Silicon Valley Bank (SVB) failed on March 10, and since then the price of bitcoin (BTC) has been on a tear.

In the early hours of March 10, bitcoin was trading around $19,600. It whipsawed just above and below $20,000 until around 12 p.m. ET when it was announced that SVB was going into FDIC receivership.

At that point, bitcoin shed $200 to dip below $20,000, jumped around a bit and spent most of the weekend trading above $20,000.

By Monday, March 13 at 9:30 a.m. ET it was trading at $22,386. And then the fun began. Just 24 hours later, bitcoin was trading at $26,175, at one point even touching up against $26,500. As of publication, it is currently sitting around $26,700.

I’ve maintained (here and here and probably elsewhere) that narrative matters a lot when it comes to the price of assets. If you don’t believe me, you could ask Federal Reserve Chair Jerome Powell, who said that “people’s expectations of inflation have a real effect on inflation.”

So what happened to the narrative to lead to this type of aggressive 35% trough-to-peak change? It’s simple, really: A lot happened.

On One Hand, The Bank Failures

Given Bitcoin’s history, the bank failure adjacency is obvious here: At least three banks have failed, others – both American and non-American – are failing. Because it’s not because of Bitcoin, that’s good for bitcoin’s price.

Actually, it isn’t clear who is at fault for the three bank failures, because who even knows if these banks are failing due to insolvency?

Sure, SVB failed due to an old-fashioned bank run that was spurred on due to apparent weaknesses on its balance sheet because of poor duration risk management.

And, yes, Silvergate was running into some issues and had to take an FHLB Loan, but its eventual winding down was reportedly voluntary.

And then we have Signature Bank, where even the regulators can’t figure out if the bank was shut down because of crypto or because of a “crisis of confidence” in leadership.

Let’s add on the fact that there are wider risks to the broader banking system. Credit Suisse (CS) just received a 50 billion Swiss franc loan from the Swiss central bank, and 11 banks just injected $30 billion into California-based regional bank First Republic Bank (FRC) in order to save it.

On the former, it is telling that the central bank wants to save Credit Suisse. On the latter, it is even more telling that banks want to save a competitor for fear of contagion. (Otherwise, why wouldn’t they just let a competitor fail?)

That all said, we know one thing that isn’t causing these banks to fail. These banks aren’t in trouble because of bets on bitcoin, crypto or the companies in those industries.

What appears to be happening is the fractional reserve banking system is under stress due to rising interest rates, and it’s showing cracks.

And so the narrative goes: As the banks fail, opt out and buy bitcoin. That narrative is strong enough to propel the price.

Amid all the market turbulence, bitcoin’s price is going up faster than even the much smaller and often more volatile altcoins.

We see that with bitcoin dominance, a measure that looks at bitcoin’s market capitalization compared to the rest of the cryptocurrency market, which reached a nine-month high at 45.5% on Wednesday.

So in all: There’s systemic global bank risk, stablecoins in crypto proved they need those banks to be stable, and amid all the general angst the Federal Reserve may be pulling back on rate hikes. All that has added up to bitcoin swinging up massively over the last week.

That continues is anybody’s guess. To be sure, uncertainty is never cause for celebration because of its potential negative consequences on people’s lives.

But for the time being, bitcoin, with its fixed issuance at a time of monetary expansion, looks like a way to opt out of this most recent crisis.

Maybe it is.

Updated: 3-18-2023

Bitcoin Market Cap Grows 60% In 2023 As Top Wall Street Banks Lose $100B

Bitcoin’s Volatility Should Burn Investors. It Hasn’t

Bitcoin has decoupled from stocks and continues to rise 10 years after the Cyprus banking crisis coincided with a BTC price boom.

The market capitalization of Bitcoin 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.

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.

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%).

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 crisis further expanded with the near-collapse of First Republic Bank, which was saved at the last moment through a $30 billion combined injection by Wells Fargo, JPMorgan Chase, Bank of America and Citigroup — among others.

Cyprus And Greece Deja Vu?

The rise of Bitcoin in the face of a growing U.S. banking crisis is similar to how it reacted during banking collapses in Cyprus and Greece.

BTC’s price grew by up to 5,000% amid the Cyprus financial crisis in 2013, prompted by the exposure of Cypriot banks to overleveraged regional real-estate companies.

“Fears over the stability of the banking system, along with declining real interest rates, creates a good environment for Bitcoin to rebound,” commented Ilan Solot, co-head of digital assets at London broker Marex, adding that the crypto “is seen by some investors as a hedge against systemic risks.“

Updated: 3-19-2023

Bitcoin Thrives in Chaos, Breaks Above $28,000 For First Time Since June

* The Token Has Not Breached That Threshold Since June 2022
* Token Prices Rose Despite A Turbulent Time For Markets

Turmoil in the banking sector, hotter-than expected inflation data, and renewed hopes for a dovish Federal Reserve has Bitcoin reaching levels not seen in about nine months.

The largest digital asset topped $28,000 for the first time since June 2022, trading for as much as $28,258 on Sunday. Since the start of the year, Bitcoin’s price has risen almost 70%.

Other digital assets rallied as well — with Ethereum up about 17% since the start of last week and so-called altcoins like Solana and Cardano advancing, too.

Traders waded high levels of uncertainty last week in markets. US two-year yields fluctuated wildly, and the Cboe Volatility Index, the so-called fear gauge also known as the VIX, spiked above 30. But Bitcoin kept steadfast — and straight up.

“Bitcoin is correlated with liquidity conditions and real rates. Real rates have declined, liquidity conditions have expanded, and it looks as if we’re entering a new regime,” said Ilan Solot, co-head of digital assets at Marex.

Bitcoin’s Volatility Should Burn Investors. It Hasn’t

Broader markets fluctuated in the past week after a handful of US lenders failed, and fresh concerns arose around Credit Suisse Group AG before UBS Group AG agreed to buy its fellow Swiss bank on Sunday. In the fallout, some investors have called on the Fed to pause interest rate hikes.

But midweek data showed that core CPI advanced more than expected, a reminder that the fight against inflation is far from done. It’s unclear how the central bank will respond to the conflicting signals at this week’s Fed meeting.

That uncertainty troubled many corners of the financial world but emboldened Bitcoin bulls who see the digital asset as a hedge against inflation, despite last year’s evidence to the contrary.

In 2022, a series of bankruptcies and scandals pushed the price of Bitcoin down more than 60%.

The token also rose in spite of internal strife in the digital asset space. USD Coin briefly lost its peg with the dollar this month, and the US Securities & Exchange Commission is doubling down on the belief that most digital assets qualify as securities.

The S&P 500 dropped 1.1% on Friday. If Bitcoin were still trading like it did for much of 2022, the token would have slumped alongside US stocks. But this month, the correlation between the digital asset and the S&P 500 has dissipated.

“In this instance, we are definitely seeing people look to Bitcoin,” said David Martin, head of institutional coverage at digital asset prime brokerage FalconX.

Bitcoin Hovers Over $28K Amid Banking Instability

Good Morning. Here’s what’s happening:

Prices: Bitcoin is pushing past $28,000 but might face some resistance at $30,000.

Insights: What’s driving the recent surge in bitcoin’s price? Investors are looking for a safer bet in cryptos but liquidity remains an issue.

Bitcoin Breaks Free Of Its Banking Troubles

Good morning, Asia.

Bitcoin is continuing its tear as Asia begins its business day.

The world’s largest digital asset by market capitalization recently pushed past $28,000, gaining 3% in the last 24 hours.

Remember how the decline of crypto-friendly banks was supposed to smother crypto?

That narrative didn’t last long. Turns out that after the first chapter of the book, where Silvergate and Signature die, there’s a systematic crisis of confidence in the global financial system, which has rekindled an appetite for risk assets as traditional finance (TradFi) liquidity dries up – despite shaky fiat pipelines.

In Asia, things are slightly different.

David Bachelier, Asia-Pacific CEO of Flowdesk, points out that Singapore and the rest of Asia weren’t really affected by the collapse of Silicon Valley Bank (SVB) and the rest of the U.S. banking crisis, but it remains uncertain if banks are going to step in and try and fill the gap.

“SVB was a key player in providing funding and other services to high-growth companies that many Asian banks do not offer,” he told CoinDesk in a note. “This presents a critical moment for the venture industry in Asia, with an opportunity to fill the gap left by the collapse of American players.”

Bachelier said that while there might not be an Asian SVB anytime soon, one thing these banks are doing is stepping up and providing fiat pipelines for crypto.

“The recent announcement from Coinbase highlighting banking partnerships in Singapore is also interesting to note as it highlights an American company expanding further into the Asian region, suggesting the comparatively minimal disruption in response to these banking crises,” he said.

The question is, though, how long will this rally last?

Joe DiPasquale, CEO of digital asset manager BitBull Capital, said bitcoin is preparing to test $30,000, but, fundamentally, support might not be there.

“From a technical aspect, the current price action is overheated and we could see a correction toward $25K in the near term. The major market mover will most likely be [the Federal Reserve’s Federal Open Market Committee meeting], in about [three] days, where the majority of the analysts believe we will see a 25 [basis point interest rate] hike at best,” DiPasquale told CoinDesk in via email.

So perhaps we won’t be hitting $1 million bitcoin by June.

Updated: 3-20-2023

Bitcoin, As Safety Play, Climbs Past $28K

The latest price moves in crypto markets in context for March 20, 2023.

Bitcoin climbed 4% in the past 24 hours to above $28,000 for the first time since last June as some traders see the cryptocurrency as a hedge against the traditional banking system, which has had its share of troubles over the past few weeks, including the collapse of Silicon Valley Bank and regulators’ takeover of Signature Bank.

On Sunday, the Federal Reserve announced it had joined with other major central banks to ensure a steady flow of the U.S. dollar, a dominant reserve currency, in the global financial system. Bitcoin was up 25% this month through Sunday.

The dollar value locked in the number of open bitcoin futures contracts is rising, signifying increased speculative interest in the market and potential for price volatility.

Data from Coinglass shows the nominal value of open interest has reached a yearly high of $12 billion, marking a 7% gain for the month.

An increase in open interest means new money is flowing into the market but doesn’t reveal much about whether traders are getting in position for price gains or losses.

In bitcoin’s case, the new money seems to be betting on price gains, considering the funding rate or the cost of holding bullish long/bearish short positions has flipped into the green after spending most of the early parts of the Asian trading day in the red.

Bitcoin Fans Look To $30,000 As Next Target As Trouble Swirls Around Banks

* Three Arrows Founders Pointed To Level As Key During Collapse
* Token Is Becoming Overbought, Miller Tabak ‘S Maley Says

With Bitcoin staging a staggering rally in recent days amid turmoil within the global banking system, its advocates are now turning to the coin’s next important milestone: $30,000.

The largest digital coin has gained roughly 25% since March 8, when signs first emerged of trouble around Silicon Valley Bank, which has since folded and ignited turmoil among other lenders.

The digital currency has added more than 20% since the start of the month to trade around $28,000, its highest since June of last year when a series of implosions within the digital-assets space itself rocked the industry and pressured prices. It last traded at $30,000 during the meltdown of now bankrupt lender Celsius, also in June.

Those watching its new surge say some investors might be finding comfort in the idea that Bitcoin and other digital assets are out of reach of regulators and are outside the financial system, which in some ways isolates them from the issues affecting the broader bank sector.

“Intellectually, you could see that attractiveness to it where you don’t need to be worried about the Fed coming in,” said Chuck Cumello, president and chief executive officer of Essex Financial Services.

“That’s not to say that Bitcoin doesn’t have a host of other issues that the average person should be worried about,” he said, “but that was one of its siren songs, that was one of the things that drove and attracted people to it, and I’m not surprised in any way, shape or form that it’s up in this kind of environment.”

Three US lenders — Silicon Valley Bank, Silvergate Capital Corp. and Signature Bank — have been embroiled in the current episode, with investors on the lookout for any others that might still be affected as regulators look to stem further fallout.

The crisis of confidence has spread to Europe as well, where over the weekend UBS Group AG agreed to buy Credit Suisse Group AG for more than $3 billion in a government-brokered deal. Market-watchers say that it’s all helping Bitcoin rally.

“Bitcoin is on an absolute tear,” wrote a team at Kaiko led by Dessislava Aubert and Clara Medalie. “Market sentiment has undergone a dramatic reversal over the past week, bolstered by an ongoing banking crisis that has strengthened crypto’s original narrative among investors.”

Research from the firm shows that crypto trading volumes reached their highest level since the FTX collapse at the end of last year.

Bitcoin proponents have also pointed to its other purported characteristics as a reason to hold the coin in this environment, including that it could potentially be used as a hedge against inflation thanks to its limited supply.

Still, that proposition has been put to the test over the past two years, during which cost-of-living prices have increased sharply as the coin has lost more than 50% in value.

No matter the cause, the coin — and others — have been jumping higher, with the $30,000 milestone remaining key for the largest token. If anything, round numbers tend to be psychologically important for investors.

In an interview with Bloomberg News last year, the founders of Three Arrows Capital pointed to $30,000 as having been a pain-point for their fund once the token’s price broke below that level.

Yet, thanks to its quick uptick, Bitcoin is trading in technically overbought levels, points out Matt Maley, chief market strategist at Miller Tabak + Co., and that might make it more difficult for it to cross the critical point.

“Bitcoin has been an asset that has moved with liquidity flows in the past. With this crisis, the Fed injected liquidity last week, so I think the move has more to do with added liquidity than investors seeing Bitcoin as a flight-to-safety asset,” said Maley.

“It’s getting overbought, so Bitcoin will have a tough time breaking above $30k as this crisis calms down.”

Holding Bitcoin: A Profitable Affair 88.5% Of Days

Bitcoin’s historical price performance confirms that a hard limit on total supply and seamless global usability is critical to becoming a store of value.

Of the 4,593 days of Bitcoin’s existence as a tradable asset, BTC hodlers experienced 4,065 profitable days — challenging the historical narrative of depreciating volatility in crypto. As a result, holding Bitcoin is provably profitable in the long run.

Bitcoin’s historical price performance confirms that a hard limit on total supply and seamless global usability is critical to becoming a store of value.

Data from Blockchain.com shows that Bitcoiners enjoyed 88.50% of profitable days relative to the current market price at the time of writing.

As shown above, just 531 or 11.56% of the 4,593 days were unprofitable for long-term holders. The unprofitable days are between Dec. 28, 2022, and June 12, 2022, a time when Bitcoin was priced above the $26,246.58 and $28,344.5 range.

The revelation highlights the importance of understanding Bitcoin’s market cycles and why investors should avoid buying the tops and selling the dips.

However, some traders prefer making daily trades on crypto exchanges for much smaller but consistent profits.

In a recent publication, Cointelegraph detailed the different types of crypto investors and categorized them based on their investment mindset.

As mentioned, there are four main categories of mindsets of crypto bag holders: maximalists, hodlers, fomoers and traders. Read more to find out which one you are.

In the Bitcoin ATM ecosystem, manufacturer General Bytes closed down its cloud services after discovering a “security vulnerability” that allowed an attacker to access users’ hot wallets and gain sensitive information.

On March 17-18th, 2023, GENERAL BYTES experienced a security incident.

We released a statement urging customers to take immediate action to protect their personal information.

We urge all our customers to take immediate action to protect their funds and https://t.co/fajc61lcwR… https://t.co/g5FGqvqZQ7

— GENERAL BYTES (@generalbytes) March 18, 2023

“We’ve concluded multiple security audits since 2021, and none of them identified this vulnerability,” General Byes founder Karel Kyovsky concluded as he made the announcement.

Updated: 3-21-2023

Bitcoin Booms In Wake of Bank Crisis

The world’s largest cryptocurrency has risen almost 70% so far this year.

Bitcoin was all but left for dead after the implosion of crypto exchange FTX, but its recent rally is proving naysayers wrong.

The world’s largest cryptocurrency has risen 21% so far this month on the back of the banking crisis, bringing bitcoin’s rally to almost 70% so far this year. Bitcoin traded above $28,000 on Sunday for the first time since June.

Bitcoin has surged despite a federal regulatory crackdown on crypto companies and an increasingly risk-averse market environment.

Many investors think the rally won’t last—and have placed bets against the token’s price.

Amid bank turbulence last week, investors added a record $35 million into exchange-traded products that bet against bitcoin, according to data compiled by crypto asset manager CoinShares.

Still, the banking turmoil rattling global financial markets has boosted the confidence of investors who view the digital currency as an alternative to the traditional banking system.

“Narratives are more powerful in crypto in generating real price movements than any other asset class,” Clara Medalie, director of research at Kaiko, said. “No matter what your thoughts on how powerful that narrative is, people actually believe this.”

An anonymous internet user named Satoshi Nakamoto launched bitcoin in 2009, on the heels of the global financial crisis. The cryptocurrency initially attracted interest from a niche group of investors following bank failures and government rescues.

While its popularity has grown among speculative investors in the roughly decade-and-a-half since, it has retained a status among some as being an asset more removed from the banking system than stocks and government bonds.

“When you see the banking system in peril, you realize that bitcoin was really invented to create independence from those risks and to get away from the whims of central banks,” said Michael Safai, managing partner at crypto high-frequency trading firm Dexterity Capital.

Bitcoin’s rally has been driven by a small number of wealthy crypto investors. On Monday, the number of bitcoin buyers and sellers was near its lowest point since summer 2022, according to Kaiko.

When markets have fewer traders, it can lead to outsize moves—higher and lower.

These investors bought bitcoin on hopes that the Fed may slow its pace of interest-rate increases and benefit bitcoin, said Ms. Medalie.

“A lot of people in crypto think that interest rates are turning around and that’s going to be great and spark a new bull run,” Dexterity Capital’s Mr. Safai said.

In contrast to bitcoin’s recent rally, the bearish sentiment on the token has been building up for a while.

“Investors are becoming more proactive with short positions,” said James Butterfill, head of research at CoinShares. “That’s not a trade that has done particularly well this year given the price increases, yet people are quite active in it.”

Mr. Butterfill noted that crypto investors have been particularly sensitive to regulatory and interest-rate developments. They tend to pull money from long-bitcoin funds while adding to short-bitcoin products after the Federal Reserve announces interest-rate increases and regulators take action against crypto companies.

Since regulators started to crack down on some of the biggest crypto players, investors have pulled about $424 million from global exchange-traded products that track the price of bitcoin while adding around $45 million into ETPs that track the inverse of bitcoin’s price, according to data compiled by CoinShares for the six weeks ended March 17.

So far this year the investors who have bet against crypto have lost.

ProShares Short Bitcoin Strategy ETF, which tracks the inverse of the daily performance of the S&P CME Bitcoin Futures Index, has declined 46% this year, according to Morningstar data as of Monday.

Shorting crypto stocks also hasn’t been a profitable trade. Short sellers borrow shares and sell them on the open market, hoping to buy them back at a lower price and pocket the difference as profit.

Investors betting against crypto exchange Coinbase Global Inc. and bitcoin-buying software intelligence firm MicroStrategy Inc. were down 76% and 62%, respectively, this year, according to Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners.

Coinbase and MicroStrategy are among some of the most heavily shorted crypto stocks. About 23% of Coinbase’s shares available for trading were sold short, while 33% of MicroStrategy’s shares available for trading were sold short, according to S3 Partners data as of March 17.

Crypto’s recent rally has lured some investors back into the market. Open interest in bitcoin options on the crypto derivatives exchange Deribit reached a record high of 388,000 with a notional value of about $11 billion, according to data from the exchange.

Open interest—the number of unsettled and active futures contracts trading on exchanges—measures market sentiment and strength behind price trends.

Some investors remain cautiously optimistic about the trajectory of bitcoin’s price, especially as it has surged against the backdrop of a banking crisis.

Todd Morakis, co-founder of digital-asset financial-services firm JST Digital, said his firm bought some bitcoin before the recent rally and is assessing whether it is time to take some profits off the table.

“The whole idea of owning bitcoin, at least initially, is that people weren’t trusting the banking system,” Mr. Morakis said. “But I think we will follow the lead of the U.S. stock market.”

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