Facing an 11% decline in the Bitcoin price in 2022, MicroStrategy and Square are down by 21% and 33%, respectively. The Nasdaq index has dropped by 15% so far this year, 4 points below the value of BTC.
Analyst Will Clemente said Bitcoin (BTC) outperforms traditional stocks like PayPal, Facebook, and the Nasdaq index despite the decline in its price. He explained that Shopify and Netflix have dropped by up to 60%, while the returns of BTC have decreased by 11.6%.
The conflict due to the invasion of Ukraine by Russia has affected traditional stocks and the price of Bitcoin. Likewise, the Federal Reserve rate increases starting in March could lead to at least five more rises in 2022.
The stocks included in the S&P 500 and Dow Jones indexes have dropped less than Bitcoin by 7.16% and 3.76%, respectively. However, the technology shares of the Nasdaq index have fallen by 15.56%, four points more than BTC.
If Bitcoin, which fluctuates at around USD 40,000, continues to rise, the outlook for the cryptocurrency may be better than for traditional shares. Of course, that will depend on the behavior of those users that buy BTC in the coming days and months.
Bitcoin Is a Better Investment than Firms Investing in It
In the bullish stage of Bitcoin that reached its maximum in November 2021, the stock market favored the companies that had invested in Bitcoin. MicroStrategy and firms linked to Bitcoin mining led those firms whose respective shares experienced growth in their price along with BTC. With the correction of the value of BTC, the companies associated with Bitcoin have suffered more severe setbacks in percentages than the price of BTC.
The Wall Street Journal indicated that companies linked to Bitcoin have lost up to 60% this year. Bitcoin and Coinbase have lost 11% and 42%, respectively, while Riot Blockchain has dropped by 34% in the same period. The market capitalization of publicly-traded companies investing in Bitcoin went from USD 100 billion to USD 40 billion.
In August 2020, MicroStrategy started the trend of investing in Bitcoin, which it still does, as part of its strategic reserve. Since the beginning of 2021, the company has fallen by 21.18%, almost twice as much as Bitcoin. Similarly, Block (formerly known as Square), a company founded by Jack Dorsey, has lost 33.41% so far this year although.
Bitcoin is trading at around USD 39,366 and has accumulated a 5.3% loss in the last 24 hours. Its trading volume is above USD 49.30 billion, and its market capitalization is about USD 748.70 billion, according to CoinGecko.
Even though the price of BTC is undergoing a bearish trend, it has performed better than traditional Wall Street stocks. Besides, experts consider that investing in the crypto asset would yield higher returns in the long term than company shares. Carlos Maslatón predicted that its price might reach USD 100,000, and Paolo Ardoino believes it will become the ideal financial structure.
By Alexander Salazar
