Bitcoin has reached a milestone of record-low annual volatility compared to gold, indicating a maturation phase for the cryptocurrency that could signal an end to its period of outsized gains. Bitcoin's 60-day volatility relative to the S&P 500 has also hit a historic low, while its price remains near an all-time high against the stock index, suggesting potential for a market reversion favoring gold. The current subdued risk metrics for Bitcoin versus both gold and the S&P 500 imply possible breakout scenarios, though Bitcoin's future appreciation may be more gradual and institutional in nature. Meanwhile, parallels between the S&P 500 market cap stretching to twice the US GDP and the 1929 market conditions highlight a risk of deflationary downturns, potentially shifting market burdens onto Bitcoin. Since 2008, the S&P 500 Total Return Index has experienced only two down years, both severe, reinforcing concerns about equity market normalization. Over the past four years, gold has outperformed Bitcoin as an asset, offering similar returns since early 2021 but with significantly lower monthly volatility, smaller drawdowns, and a much lower correlation to stocks (14% for gold versus nearly 60% for Bitcoin). This data underscores gold's relative stability compared to Bitcoin amid evolving market conditions.
For more than 4 years, Gold has been a far better asset to hold than Bitcoin. While the returns have been similar since 1Q21, Gold has had 1/4 the monthly vol and drawdowns, and a mere 14% correlation to stocks vs. Bitcoin's near 60%. https://t.co/DKcV3BGcm3
Bitcoin/Gold May Lead the Way Lower - The nearly unprecedented premium in US equity prices is ripe for some normalization and the ounces of gold equal to a Bitcoin could be a guide. Since 2008, the S&P 500 Total Return Index has had only two down years -- both of which were bad https://t.co/lMqIyEkFsm
S&P 500/GDP 1929 Parallels Favoring Gold vs. Bitcoin - Staying lofty may be a top prerequisite for the US stock market to avoid a typical deflationary downturn following inflation. That undue burden could have shifted to Bitcoin. Full report on the Bloomberg here: https://t.co/p34eRUjVLQ