- Bitcoin up 90% YTD beating S&P 500’s 31% and gold’s 30% returns
- While we are in the longest equity bull market, investors are flocking to gold
- Bitcoin however is the best performing asset of the decade that has your $1 now worth $90,000
The world’s leading cryptocurrency is currently trading at $7,350 as per Coincodex, up about 90% on a year-to-date basis.
During the first six months, the BTC price went from $3,700 to $13,900, with Facebook launching its stablecoin Libra in June adding fuel to the fire.
However, in Q3 the sentiments changed and crypto sell-off started which could have been driven by Libra facing strong opposition from the regulators all over the world that has the market in fear that stringent regulations may come for the cryptocurrencies at large as well.
Miners selling their BTC further added to the selling pressure that has BTC down 48% from its 2019 high. Prices hit seven-month lows at about $6,400 earlier this week despite being bullish this weekend, up another 2.2% in the last 24 hours.
Despite this downturn, Bitcoin’s 2019 performance has been positive and beating any other market.
Equity has its Longest Bull market while Investors Flock to Gold
The stock market this year hit new highs but still while Nasdaq recorded a 38% surge, S&P 500 was up 31%. In the last 20 years, only 2013 with 32.4% returns had a higher total return than 2019.
Gold, the classic safe haven asset meanwhile was up only 15% trading at $1,474 per ounce, near its April 2013 level.
Both gold and the stock market likely were driven by the US Federal Reserve’s monetary easing. The central bank made three 25-basis-point interest rate cuts in the second half and expanded its balance sheet by over $300 billion since Sept.
Central banks’ effort to jumpstart their sluggish economies by slashing interest rates to below zero has $17 trillion worth of sovereign debt generating a negative yield.
As interest rates fell, investors flocked to gold which was the top commodity of the 2010s.
Converting your $1 to $90,000
In 2019, the correlation between gold and Bitcoin also surged to 0.18 level in July, last seen in December 2016. Currently, the correlation is at the 0.1 level.
Source: Coin Metrics
Gold according to Bloomberg Intelligence analyst Mike McGlone is expected to shine in comparison to gold, if the dollar stops advancing. Also, a declining US equity market is a “primary force” that support metal.
“The gold-to-stocks ratio is potentially bottoming from a good support level despite a resilient greenback.”
Bitcoin’s 2019 performance makes it an attractive option than traditional markets as such making its way to investors’ investment portfolio.
The flagship cryptocurrency has been, in fact, the best asset of the decade. The digital asset rallied by 5,428% and 1,336% during its two bull markets, 2013 and 2017 respectively.
An early chart by Trololo posted to Reddit in 2014
According to a report by Bank of America Securities, if you invested $1 in bitcoin at the beginning of the decade, it would be worth more than $90,000.
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