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Author: Matt Hougan, Chief Investment Officer of Bitwise; Translated by: AIMan@Bitlink Vision
There is a notable fact: Bitcoin has kept its price flat for the past month.
When I wrote this memo on April 14, Bitcoin was trading at $84,379.A month ago, it was priced at $84,317.This means a 0.07% return in 30 days.
Think about it.
From the establishment of the strategic reserves of Bitcoin in the United States to President Trump imposing tariffs on the world, the cryptocurrency market has suffered an absolute huge impact from all parties, while our development has completely deviated from its previous trajectory.
I want to cry when I think about the time, energy and anxiety I have spent on the market over the past 30 days.
But at the same time, I was deeply impressed by Bitcoin’s recent performance.U.S. stocks peaked on February 19 and have since fallen 12.0%.Bitcoin fell 12.4% during the same period.
This is significantly different from the previous market pullback.
The last time the stock market entered a pullback was in 2022.At that time, the S&P 500 index fell 24.5% between January 3 and October 12.Bitcoin fell 58.3% during this period.
Before this,At the beginning of the COVID-19 outbreak in early 2020, the S&P 500 fell 33.8%… Bitcoin fell 38.1%.
Going further,At the end of 2018, the escalation of the Sino-US trade war caused the stock market to fall by 19.36%.Bitcoin fell 37.22%.
In fact, since Bitcoin broke the $1 mark in 2011, it has never outperformed the stock market during a full market correction.But this time, I think it has a chance.
Critics would point out that catching up with stocks during a downturn is different from acting as hedge assets, and that gold outperforms Bitcoin in this pullback.That’s true.
Others may notice that the stock market may not have bottomed out yet, or have rebounded in the past few days (just like Bitcoin).(For more timely, I used data as of today’s release date.)
But none of these can conceal a more important point: Bitcoin currently looks very resilient.The world is falling apart, while Bitcoin is trading at more than $80,000.If that doesn’t give you confidence in its endurance, I don’t know what else can do.
Bitcoin is growing before our eyes
You might ask:Why does this happen?I think this is a sign of Bitcoin’s maturity.
What is unusual about Bitcoin is that its returns are driven by two forces that sometimes oppose each other.
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Risk assets:Bitcoin is a risky asset to some extent: an emerging, technology-driven investment that has historically brought high returns while also bringing high volatility.
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Hedging assets:On another level, Bitcoin can play a role similar to gold, hedging macro policy errors and fiat currency depreciation.
In the early days of Bitcoin, the “risk assets” element dominated.Bitcoin’s success is questioned, so when the market enters a “safe-haven” mode, Bitcoin will suffer a heavy blow, with a drop even exceeding the stock.
Nowadays, as more and more businesses and institutions buy Bitcoin and more governments use it as a strategic reserve, the saying of “held assets” is becoming more and more popular.Investors increasingly see it as digital gold.As a result, Bitcoin’s beta coefficient is lower than stocks during a period of market decline.
No one can guarantee that this relationship will last, nor can we guarantee that the amazing strength of Bitcoin we have seen recently will continue into the future.But so far, things look pretty good.
Our children are growing up and becoming an important asset.This is a comforting thing.
