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April 22, 2022

Bitcoin (BTC) is outperforming Wall Street’s top stocks

While Bitcoin (BTC) maintained a tight trading range this year, it outperformed several major technology equities. Year-to-date losses at IT behemoths like Alphabet, Microsoft, Amazon, and Meta were significantly more than at BTC.

In 2022, BTC has generally tracked major US technology equities. However, a disparity in their YTD performance could signal that decoupling is possible in the future. The token has also outperformed the Nasdaq composite index, which is heavily weighted on technology.

The world’s most valuable cryptocurrency is currently down around 12% year to date. Alphabet, Microsoft, and Amazon, on the other hand, are down between 13 and 17 percent. The Nasdaq composite index has also dropped by roughly 16%.

Only Apple has outperformed BTC among the five most valuable equities on Wall Street. The stock of the iPhone maker is down around 9% for the year. Tesla, which has BTC on its balance sheet, has lost approximately 16 percent so far this year.

Meta Platforms, the company that owns Facebook, has dropped 44% this year due to concerns over falling user numbers.

While the underlying emotion driving BTC and stock losses is similar—concerns about increasing inflation and a hawkish Federal Reserve—the token appears to be more immune to market volatility.

However, this resiliency is limited to tech equities. Berkshire Hathaway, the largest non-technology company on the S&P 500, has outperformed Bitcoin this year, rising 13.5 percent.

During periods of high inflation and tighter monetary policy, non-technology sectors tend to perform better. UnitedHealth Group and Johnson and Johnson, a pharmaceuticals major, are both up 7%.

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The currency’s obvious sensitivity to inflation and market volatility disqualifies it as a safe haven. In terms of relative performance, it has outperformed large tech equities, but it is far from the best performing asset this year.

Gold prices reached their greatest level in recorded history this year as a result of safe haven demand. The yellow metal is also roughly 7% higher year-to-date.