Bitcoin is up 50% this year despite the collapse of major crypto-focused banks, beating major stock indexes and commodities.

On Jan. 1, bitcoin began trading at just over $16,500. On Wednesday, it was hovering around the $25,000 mark, thanks to a rally that began on Sunday.

The surge in price this year comes after bitcoin crashed 65% in 2022 after a number of major collapses of projects and hedge funds, bankruptcies, liquidity issues and the failure of FTX, one of the world’s biggest cryptocurrency exchanges.

The recent rise has come as somewhat of a surprise, given the closure of Silvergate Capital and Signature Bank, two of the biggest lenders to the crypto industry. And Silicon Valley Bank, viewed as the backbone of the technology startup industry, also failed.

“Bitcoin’s 50% surge in 2023 is a reflection of how beaten down it was post the FTX collapse, the changing interest rate outlook and the failure (& resurrection) of SVB,” Antoni Trenchev, co-founder of crypto trading platform Nexo, told CNBC.

From its peak of nearly $69,000 in November 2021, bitcoin is still down more than 60%.

Here are some of the main reasons bitcoin is up.

While the collapse of Silvergate, Signature Bank and SVB sent shockwaves through financial markets, bitcoin’s rebound could also be fueled by those very failures, according to Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno.

“This past week’s events around the failure of SVB and other banks have also shone a spotlight on the power of decentralised currencies that people can fully custody and own,” Ayyar said. “Decentralised finance is beginning to hit home in terms of a concept to many more people now.”

Bitcoin is called a decentralized currency because it isn’t issued by a single entity like a central bank. Instead, it relies on an underlying technology called blockchain and its network is maintained by a community.

U.S. regulators had to step in to guarantee customer deposits at these banks, however.

Nexo’s Trenchev said the intervention “reminded investors about the structural deficiencies of the U.S. banking system and the U.S. dollar underpinning it, reasons why we’ve seen a flight to Bitcoin this week.”

Bitcoin proponents have claimed the digital currency is a way for investors to protect themselves against central bank moves, particularly quantitative easing and looser monetary policy, which they say erodes the value of fiat currency. Proponents point to bitcoin’s finite supply as a key feature of it being a store of value.

The bank collapses came after a year of interest rate hikes from the U.S. Federal Reserve. SVB’s issue was that it had to sell off assets, mainly Treasurys, to shore up its balance sheet as depositors withdrew funds. But it sold those assets at a hefty loss because interest rate rises had pushed the price of Treasurys lower.

Some analysts have suggested the stress on the financial sector could slow down the pace of rate hikes from the Fed, which could help risk assets, such as stocks and bitcoin. That came even after Fed Chair Jerome Powell said days before the bank collapses that rates are likely to be higher than policymakers anticipated.

“In the space of a few days we’d turned from a hawkish Powell to an environment where economists were predicting the Fed might not even hike rates in March, benefiting Bitcoin,” Trenchev said.

“It’s been said that the Fed will only stop hiking rates when they break something, and now that something is broken, attention has turned to Bitcoin.”

Bitcoin has rallied 50% this year. In contrast, the tech-heavy Nasdaq, which bitcoin has been closely correlated to in the past, is up 12% in the year to date. The S&P 500 is up 2.5%.

Gold, which is seen as an asset that investors flock to in times of market turmoil, is up just over 3% this year.

There aren’t many commodities or stock indexes that have beaten bitcoin. In terms of individual stocks, Meta is up around 60% in the year to date.

Among the major digital currencies, ether has rallied 42% this year, while solana is up more than 100%.