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Year-to-date Bitcoin price chart (Source: YCharts)
A lot has transpired since March’s regional banking scare. Just as it looked like a contagion effect could leech into the broader U.S. banking industry, causing gold prices to spike, Treasury Secretary Janet Yellen announced that the sector was “sound” after regulatory measures were put in place to contain the spread.
Since then, inflation has decelerated to 4.9%, job growth outperformed expectations, and the nascent debt ceiling crisis looks all but resolved. As a result, traditional risk hedges like gold, silver, and even cryptocurrencies have more or less held steady while the stock market rose.
Let’s take a look at how the market has performed overall over the past 31 days.
Market Snapshot: June 1, 2023
- Inflation Rate: 4.9%
- Fed Rate: 5.00% to 5.25%
- Gold Price: US$1,982/oz.
- Silver Price: $23.91/oz.
- Bitcoin Price: US$26,913
- Ethereum Price: US$1,865
The end result is that we’ve seen traditional markets perform well in light of strong macroeconomic indicators as of late. In May, the S&P 500 rose 2.46%. Given that the 2021 crypto market bull run coincided with a strong stock market, this may be a bullish signal for investors in digital assets—even more so if interest rates start to fall.
As seen above, the year-to-date performance of Bitcoin remains remarkably strong. Since January, the per-token price of BTC has risen from about US$16,600 to $27,245, an incredible gain of over 64%. Bitcoin briefly nudged close to the elusive $30,000 mark toward the beginning of the month before cooling off as markets stabilized later in May. Whether these gains can be maintained in the long term is uncertain, but a continued strong performance in the equities market and rate cuts from the Fed could throw some gas in the crypto’s fuel tank.
Focusing on the month of May, the second-biggest player in the crypto space, Ethereum, also performed fairly well, making modest gains of about 2% on the month. The token’s year-to-date performance, however, largely reflected Bitcoin’s, as it has gained 55% since January. The underlying signals behind Ethereum are even stronger too, as active deposits in May hit a peak unseen since November 2021, when the market was at all-time highs. If momentum continues to build, we could see a $2,000 Ether token for the first time in over a year.
News was slower in the precious metals department, with neither gold nor silver making major moves in May. Notably, however, silver dipped 4.5%, potentially opening up an entry point for those bullish on the white metal. Meanwhile, gold rallied close to $2,070 in early May before restabilizing back to its stronghold point of around $1,980.
No matter what the future holds, it may be in your best interest to diversify your investment portfolio. This way, you can be ready for anything—whether it be the next crypto bull run or a full-on recession that could see the stock market tumble.
Consider opening a tax-advantaged investment account with one of America’s leading alternative investment companies. Their teams of investment experts can help you diversify your portfolio with any number of non-traditional risk hedges, including precious metals, cryptocurrencies, and more.
Liam Hunt, M.A., is a financial writer covering global markets, monetary policy, retirement savings, and millennial investing. His commentary and analysis have been featured in the New York Post, Reader's Digest, Fox Business, and Forbes.
