• Regional banks extend losses and some paused due to volatility; Bitcoin up 2%
• Markets expect a 94% probability of rate hike: how will Bitcoin react to tomorrow’s FOMC meeting?
• Bitcoin bear market rally performance, how does it compare to previous cycles?
Regional Banks Extend Losses
Several regional bank stocks were halted due to volatility on May 2 after dropping more than 25%. The KBW Nasdaq Regional Banking Index is down a further 4% today, and is down -26% for the year. Some of the biggest losers included PacWest (-29%), Metropolitan Bank (-27%) and Western Alliance (-25%). HomeStreet dropped by 16%, Zions 11%, First Foundation 10%, and Comerica 9%. Keycorp saw the smallest decline at 8%.
Bitcoin Up 2%
In comparison, Bitcoin was up 2% today. This follows an overall bear market rally that has been performing as compared to previous cycles.
Rate Hike Probability
The markets expect a 94% probability of rate hikes when the Federal Open Market Committee (FOMC) meeting is held tomorrow. It is unclear how this news will affect Bitcoin’s price performance or whether another miner capitulation could be on the horizon.
Sharpe Ratio Indicates Bitcoin Is Best Horse in Race
The Sharpe Ratio indicates that Bitcoin may be the best „horse“ in the race. This ratio measures risk-adjusted returns, which can help investors determine which assets are providing the highest return for each unit of risk taken on. As such, it appears that investors may want to consider adding more exposure to their portfolios via Bitcoin if they are looking for higher returns with lower risk levels.
Conclusion
Overall, regional banks have seen significant losses over recent days while Bitcoin remains relatively stable with an increase of 2%. With a 94% probability of rate hikes expected at tomorrow’s FOMC meeting, it is still uncertain what effect this will have on the price performance of Bitcoin or if another miner capitulation could be coming soon. Finally, based on the Sharpe Ratio results, investing in Bitcoin could provide higher returns with lower levels of risk for those looking for portfolio diversification options.
