Ryze Recap 6/26: Bitcoin is the Best-Performing Asset of 2020
It’s June 26th— finally, it’s Friday. If you’re new here, Ryze Recaps is a daily newsletter covering the top stories that Bitcoiners need to know in 2 minutes or less.
We’ve got one important story for you today.
Bitcoin: The Best-Performing Asset of 2020
In times of uncertainty, investors seek uncorrelated assets to hedge their risk and exposure. With that said, on a recent podcast with Anthony Pompliano, Jason Calacanis asked why Bitcoin hasn’t “skyrocketed” this year given all the COVID-induced uncertainty in markets. We hear this question often, but in comparison to all other asset classes, Bitcoin has skyrocketed.
In fact, Bitcoin is the best-performing asset of the year so far.
As of June 25th, Bitcoin is outperforming crude oil by 67%, the S&P500 by 35%, Berkshire Hathaway by 51%, and gold by 13% in terms of year-to-date performance.
Why it matters:
Markets in 2020 have been extremely volatile. Bitcoin took over a 50% drop in a single day, the S&P500 was down 30% in a matter of days. However, Bitcoin recovered fully less than 7 weeks. A rise in institutional interest, as well as a strengthening of the “digital gold” and “hedge against inflation” narratives for Bitcoin, may have contributed to strong Bitcoin’s performance this year in the face of rising volatility and uncertainty.
Gold and Bitcoin have been increasingly correlated this year, giving credence to Bitcoin’s digital gold narrative. Investors seek haven in gold when market uncertainty is high, but many seem to be using Bitcoin— digital gold, for a similar purpose.
Both gold and Bitcoin are also seen as a hedge against inflation, which many predict will come as a result of unlimited global monetary stimulus (aka money printing). Bitcoin is a deflationary asset, and this year’s Halving was juxtaposed with trillions of dollars in potentially inflationary quantitative easing measures taken by central banks. While fiat currencies globally underwent quantitative easing, Bitcoin went through “quantitative hardening” as its rate of supply was cut in half. More on this in our latest research report— “Money Printing, Inflation, and the Bull Case for Bitcoin.”
That’s all for today! We’ll be back on Monday with another Ryze Recap summarizing the top stories from the weekend. Enjoy your weekend!