Only Google follows Bitcoin’s increase closely, with 70% so far this year. Gold and silver have risen by just over 50% in 2020.
This year, Bitcoin’s returns have been higher than that of traditional markets, including companies like Amazon, Google, Apple, and Facebook, with an 80% increase in value. The behavior of the pioneering cryptocurrency in the market is also better than that of gold and indices like the S&P 500 and Nasdaq 100.
According to data from TradingView, Bitcoin’s (BTC) rise in price so far this year has outpaced that of traditional markets. Only Google follows it closely, with a 70% appreciation in its shares in 2020.
Facebook and Amazon have even lower growth rates, above 60%, and Apple’s shares have appreciated by just over 50% since January.
Regarding indices and precious metals, the situation is even clearer. While BTC has risen significantly, gold and silver have appreciated by just over 50%. On its part, the Nasdaq index has risen by 30% and the S&P 500 by less than 6%. Meanwhile, the Dow Jones has dropped by 2% this year.
The price of Bitcoin has been climbing gradually throughout the year after its steep drop at the beginning of the pandemic last March. The most recent boost has led the price of BTC to exceed USD 13,000 for the first time since mid-2019.
The percentage increase in the price of Bitcoin has been greater than that of the other assets. Besides, its volatility is higher than that of those assets.
Bitcoin Decouples from Traditional Markets
In early September, the behavior of Bitcoin in the market had already been decoupling — decreasing its correlation — concerning traditional markets.
At the beginning of the year, the correlation of the pioneering cryptocurrency with other markets had reached high levels, even reaching all-time highs in some cases. For example, its correlation with the S&P 500 during the March collapse reached levels not seen before.
In April, the same thing happened with gold. On that occasion both the precious metal and the main cryptocurrency corralated 60%. In August, there was a new high of close to 70%.
That situation changed dramatically. Currently, the correlation of Bitcoin with the S&P 500 is barely 20%. About gold, it is much lower: only 6%, according to data from Coin Metrics.
Several factors seem to have influenced the increase in the price of Bitcoin. For example, data from analysis firm CryptoQuant indicate that users save (hold) an increasing amount of BTC outside exchanges. According to market analysts, this could be a sign of bullish behavior.
Also, PayPal’s official statement that it will add support for buying, selling, and paying with Bitcoin seems to have recently boosted the price of the cryptocurrency. That piece of news coincided with Bitcoin’s breaking the USD 13,000 barrier, just hours after it had exceeded USD 12,200 for the second time in 2020.
The pioneering cryptocurrency has proven since its creation that it can overcome its worst all-time lows. In recent days, it succeeded in climbing above the USD 13,000 mark. For these and other reasons, it continues to be the best option for those who want to venture into the cryptocurrency world.
By Willmen Blanco
