Bitcoin outperforms Dow Jones and S&P 500 in Q1 2020
Despite facing unfavorable conditions in the first quarter of 2020, Bitcoin still lags behind 2 of the 3 main US stock indexes: Dow Jones and S&P 500.
The Dow Jones Industrial Average is an index of industries, transportation and services, while the S&P 500 measures the US market capitalization. The Nasdaq is the stock index of the New York exchange of the same name.
Covid-19 turned the world economy upside down
The World Health Organization (WHO) reported that the organization heard about the first case of Covid-19 on December 31, 2019, when "WHO Representative Office in China received information about inflammatory disease in China". pneumoniae of unknown etiology (cause of the disease) appeared in Wuhan city, Hubei province, China”.
Since then, this rapidly spreading disease has turned our lives and the world economy upside down. The loss of life has reached a very high level: as of the time of writing, the world has identified 859,032 positive cases of Covid-19, including 42,322 deaths.
Covid-19 turns the economy upside down
More and more people are self-isolating at home as cities continue to implement blockades to control the spread of the disease, so almost all industries are affected, causing markets to be affected. Stocks around the world competed to turn into a "bear market" with a downward trend.
Bitcoin fares ahead of stock indexes
Crypto markets like primexbt exchange suffered a similar fate, yet March 12 is considered to be the bleakest day ever for all crypto-assets, including Bitcoin, when it suffered. The flash price drop is still 50%.
If we analyze the price movement of Bitcoin in Q1/2020, we will realize that the Bitcoin price dropped from $7,183 to $6,450 in the first quarter, which is a 10.2% loss of value in USD terms.
Although the above results are not too positive, especially when many people in the Crypto world have always praised Bitcoin as the optimal choice to store assets when volatility occurs. However, compared to the US stock market in recent times, Bitcoin's move seems to be much more positive.
Bitcoin fares ahead of US stock indexes
On Tuesday (March 31) and the final day of Q1 2020, the Dow Jones Industrial Average fell 1.8%, the S&P 500 fell 1.6%, and the Nasdaq fell 1%.
All in all, the Dow Jones Industrial Average fell 23.2% in the last quarter, a 124-year decline, and the S&P 500 lost 20%, its lowest level since Q4/2008.
Bitcoin is a fledgling asset class
Vijay Ayyar, sales director at exchange Luno, told CNBC:
Today, Bitcoin is still a smaller asset class and is increasingly decoupled from traditional asset classes, a process known as self-reinforcing. So I believe the current market situation presents a big test for Bitcoin. Moreover, considering the nascent nature of this asset class, Bitcoin has held up quite well.
In addition, referring to gold gaining more than 3.75% in value in Q1 2020, Ayyar said that compared to Bitcoin, gold “is in a much stronger position as a safe haven asset.” , while Bitcoin has less total users. He also added:
... in the short term, Bitcoin moves a bit slower than gold, but it can be said that in the long run, Bitcoin will take a larger market share than gold and will eventually reverse the situation when it reaches a market capitalization of equal or large. than gold, then Bitcoin's fluctuations will more accurately reflect the overall market's movements.
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