The U.S. stock market turned upside down in early 2023 as investors again bet on the stocks of companies that suffered spectacular crashes last year, Markets Insider reports.

Some of the biggest losers of 2022, such as Bitcoin, electric car manufacturers and generally unprofitable or troubled companies, experienced impressive gains in the first 6 weeks of 2023.

The price of Bitcoin is up 51% year-to-date, and Tesla’s stock price is up 72% over the same time period.

The popularity of chatbot ChatGPT in recent months has also prompted investors to look to companies that have even a vague connection to the field of artificial intelligence.

The share price of two such companies, BigBear.ai and Soundhound, increased by 491% and 107% respectively, although they are two small loss-making firms.

Despite the high risks and unprofitable business model, even the so-called “meme stocks” have recovered, with shares of GameStop up 16% and the theater chain AMC up 30%.

“Excessive” greed in the US stock market?

This type of investor behavior can be expected when central bank benchmark interest rates approach 0%, rather than the 5% currently set by the Fed, the central bank in Washington.

Marko Kolanovic, an analyst at JPMorgan Chase, says trading volume by the individual investors behind the GameStop takeover is approaching a record high of $1.5 billion a day.

But in a recent report, he warned that “there’s an old saying, ‘Don’t fight the Fed,’ but this kind of behavior is not only bellicose, it’s defiant of the Fed.”

Several U.S. central bank officials said last week that further hikes in key interest rates are likely to be needed as inflation is well above its 2% target.

Cathy Stockton, founder of research and analytics firm Fairlead Strategies, told CNBC last week that investors have become “excessively greedy,” citing the recent rally in the price of bitcoin, which is trading near 6-month highs.

“This sense of greed leads to a fragile situation,” she warned.