Why have tech stocks and Bitcoin suddenly become a safe haven for investors?

After a tough 2022, tech stocks and Bitcoin are in an unusual position in 2023 -they have become a haven for investors seekingavoid risks in the banking sector. As a result, Microsoft is up 15% this year, Apple is up over 20%, and these are the key players in the sector. In addition, Bitcoin even showed almost 100% growth.

There are several reasons for this:
1. The growth was largely driven by positive macroeconomic data in January, which showed a steady decline in inflation;
2. The fuel for growth was the quarterly reports of Microsoft and Apple, which came out above expectations;
3. Part of the rebound is a consequence of the fact that some tech investors took too much risk last year and ended up oversold;
4. Well, the finish line for them was ensured by expectations that rates would begin to decline, since the collapse of Silicon Valley Bank led to tightening of financial conditions.

unhealthy domination
Microsoft and Apple have achieved such success, andother sectors performed so poorly that the two companies' weightings in the S&P 500 and Nasdaq 100 composite indexes rose to about 13% and 25%, respectively, all-time highs. This is now what is truly worrying - narrowing leadership is rarely good for the health of the market. These are certainly resilient companies with solid earnings and excellent balance sheets, but such dominance and large index weights mean that if they falter, they will drag the entire market down with them. The same thing is now happening in cryptocurrencies - almost all the growth came exclusively from Bitcoin, and altcoins are hanging around their minimums.

What's next?
In the first half of April, similar dynamics maybe preserved. The next expected catalysts for a turnaround could come on April 12 (inflation data) and towards the end of April, when Microsoft and Apple are scheduled to report earnings.