Bitcoin Q1 2020 Performance Disappoints Investors With 10% Negative Returns
The world’s largest cryptocurrency Bitcoin has ended the first quarter of 2020 with 10% negative returns year-to-date. As of 31st March, 2020, Bitcoin was trading at around $6200 levels with a market cap of $115 billion.
Bitcoin started 2020 on a very good note with its price surging 40% in just the initial 40 days i.e. by mid-February. Bitcoin’s price went all the way from $7000 to hitting its high above $10,000 during the same period.
However, with the Coronavirus outbreak all across the globe, the crypto markets came all crashing down dragging the Bitcoin price lower. From its 2020 high above $10,000, Bitcoin has corrected over 50% in just a month time with its price going all the way low to $4500.
The overall cryptocurrency market during the first-quarter ended around 40% low as all other altcoins are witnessed a downward tailspin.
Well, Bitcoin and the crypto markets have performed absolutely opposite to the common notion that they are a substitute to the traditional stock markets. With the COVID-19 outbreak, the traditional stock markets came crashing down from mid-February.
On March 31st, Dow Jones ended its Q1 2020 with 23% negative returns in its worst performing quarter in the history of stock markets. However, Bitcoin and the crypto market behaved absolutely similar to the traditional stock market.
Well, this is contrast to the popular belief that Bitcoin would serve as a “safe haven” during times of financial crisis. The global economy looks currently in a very bad shape and things can further escalate badly from here with millions of job losses across the globe.
The question is whether Bitcoin is poised to take the mantle and assure investors of being the savior for their capital.
However, it is not for the first time that Bitcoin is showing a correlation with the traditional markets. Siddhartha Jha, a former Wall Street analyst says: “The lack of correlation to equities was a bit premature to announce. We had periods of high correlation, for example, in 2018, when bitcoin fell along with equities in December of that year”.
On the other hand, physical gold price have surged 4% during the same period. Thus it shows that gold as a commodity still trumps Bitcoin when it comes to being a safe haven.