The coronavirus and the global economy inching closer to another recession has investors paying closer attention to assets like stocks, gold, and even cryptocurrencies like Bitcoin.
And while the current crisis is causing a collapse of most assets, Bitcoin is currently crushing all other asset classes in year-to-date performance.
Concerns Over the Coronavirus Are Crippling Markets, Except Crypto
The next global economic meltdown may finally be here, fresh on the heels of a rapidly spreading pandemic and widespread panic over the proliferation of COVID19 – a potent strain of the coronavirus that has taken the lives of thousands already.
Transportation has been restricted, manufacturing has been impacted, and economic growth is slowing.
Related Reading | The Coronavirus May Be The Best Reason Yet To Own Bitcoin
Meanwhile, the general public is in such a frenzy, they’re clearing out store shelves of home essentials and sanitary products.
The panic has also hit Wall Street, with most major stock indexes experiencing the largest one week crash since the last recession.
After nearly a decade of a bull market, the stock market is down over 9% year-to-date.
Year-to-date :
Bitcoin : 31%
Gold : 10 %
Vanguard Real Estate ETF : -2%
S&P500 : -10%
US 10 Year Bond (Yield) : -62% pic.twitter.com/Fi7LRXHNXa— Jonathan Hamel (@jhamel) March 6, 2020
It’s not just stocks that are suffering, however. Bonds are providing yields at historical lows, and the real estate market has taken a hit.
Gold, a safe haven asset and flight of safety for investors to move capital when the global economy becomes uncertain, has beaten most other assets and grown in value by 10% year-to-date.
This isn’t surprising, as the last recession took gold to its all-time high.
What is shocking, however, is the fact that Bitcoin – often considered among the riskiest possible investments – is holding up extremely well during the correlated market chaos fueled by the coronavirus reaching critical status.
Bitcoin Beats All Other Investments, Here’s Why
At one point, Bitcoin had risen over 60% year-to-date, but the stock market collapse caused a short-term pullback in Bitcoin, dropping the year-to-date performance to just 30%.
While some of the return on investment Bitcoin saw this year was wiped out, the asset’s value holding up while the rest of the financial market is in collapse is an interesting phenomenon.
Bitcoin is a relatively new and unproven asset but shares many attributes with gold making it potentially another ideal option for storing wealth and preserving value during a crisis. Bitcoin is deflationary, scarce, and was built during the Great Recession to withstand and potentially even prevent future events of similar magnitude.
Related Reading | Is the Coronavirus The Black Swan Event That Crushes Cryptocurrency?
And while there’s no telling the impact a black swan event like coronavirus, if Bitcoin continues to rise while stocks collapse, the cryptocurrency could become increasingly attractive to investors seeking to continue to profit during the economic downturn.
For now, Bitcoin is crushing the rest of the investment world in terms of year-to-date performance, and with the asset’s halving ahead in just two short months, it may continue to perform for the foreseeable future.
Featured image from Shutterstock
