In 2022, Bitcoin fell 64.02%, Ethereum dropped 67.23%, and the cryptocurrency market cap lost 63.33% of its value from the level on December 31, 2021. The losses from November 2021 through the November 2022 lows were even worse. However, the asset class reached a significant bottom in November 2021 and recovered by the end of last year. In Q1 2023, the prices exploded higher, with Bitcoin and Ethereum outpacing the asset class’s overall gains. Bitcoin, the leading crypto, rose more than Ethereum on a percentage basis.
Shares in the Bitwise Crypto Industry Innovators ETF (BITQ), Coinbase (COIN), a leading cryptocurrency platform, and the ProShares Bitcoin Strategy ETF (BITO) posted gains in Q1 2023.
In a Barchart article on March 19, I wrote, “Bitcoin and the BITO could have a lot more upside over the coming weeks and months.” In Q1 2023, cryptos were the place to be, as the sector delivered the most attractive returns.
Bitcoin exploded higher in Q1
Bitcoin, the leading cryptocurrency, gained 71.65% in Q1 after dropping 64.02% in 2022.
The chart illustrates the plunge from the November 2021 high to the November 2022 low, and the recovery to the Q1 peak was even more dramatic on a percentage basis. Bitcoin reached a record $68,906.48 high in November 2021. One year later, in November, the pattern of lower highs and lower lows led to a $15,516.53 bottom, a 77.5% decline in one year. The rise to $29,147.97 in March 2022 took Bitcoin 87.9% higher than the November 2022 low.
Ethereum follows- the two leading cryptos outperform the asset class’s market cap
In 2022, Ethereum’s price dropped 67.23%, slightly underperforming Bitcoin. In Q1 2023, the underperformance continued as Ethereum gained 52%.
The Ethereum chart highlights the drop from the November 2021 high to the 2022 low and recovery to the Q1 peak, which like Bitcoin, was even more dramatic on a percentage basis. Ethereum reached a record $4,865.426 high in November 2021. Less than one year later, in June 2022, the pattern of lower highs and lower lows led to an $883.159 bottom, an 81.8% decline. The rise to $1,855.696 in March 2022 took Ethereum 110.1% higher than the June 2022 low. In early Q2, Ethereum eclipsed the $1,900 level for the first time since August 2022.
In 2022, the cryptocurrency market cap moved 63.33% lower, slightly outperforming Bitcoin and Ethereum, which dropped 64.02% and 67.23%, respectively. In Q1, the overall asset class posted a 49.10% gain as it underperformed Ethereum’s 52% gain and Bitcoin’s 71.65% move to the upside.
BITQ moves to the upside
The Bitwise Crypto Industry Innovators ETF (BITQ) holds a portfolio of cryptocurrency-related stocks. BITQ tends to move higher and lower with cryptocurrency prices.
The chart shows the rise in BITQ from $3.39 on December 30, 2022, to $5.87 on March 31, 2023, a 73.2% increase, which outpaced Bitcoin, Ethereum, and the rise in the asset class’s market cap.
COIN posted gains
Coinbase Global Inc (COIN) is a leading cryptocurrency platform.
COIN’s chart rose from $35.39 at the end of 2022 to $67.57 on March 31, 2023, a 90.9% gain, outperforming the leading cryptos, the asset class, and the BITQ ETF.
BITO rallies- The trend is always your best friend, and it remains higher in early Q2 2023
As I highlighted on March 19, “The BITO ETF is SEC-regulated, and the futures it tracks are CFTC-regulated, providing investors and traders with two levels of regulatory oversight.”
The chart shows BITO’s rally from $10.43 on December 31, 2022, to $17.52 per share on March 31, 2023, a 68% rise. BITO slightly underperformed Bitcoin’s Q1 rally as the ETF only trades during U.S. stock market hours and because of the difference between actual Bitcoin and Bitcoin futures prices.
In early April 2023, the bullish trend in Bitcoin, Ethereum, and the overall cryptocurrency asset class continued. In all markets, the trend is always your best friend, implying that higher highs are on the horizon in Q2 2023.
On the date of publication, Andrew Hecht did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
