Bitcoin has become the best performing investment asset in terms of year-to-date returns and risk-adjusted performance, outpacing traditional sectors such as technology and gold
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Bitcoin has outperformed traditional assets and investment sectors, such as technology and gold, in absolute returns and risk-adjusted performance year-to-date (YTD), according to recent data. data from Goldman Sachs.
The leading cryptocurrency has gained 51% in absolute returns year-to-date, outpacing Information Technology (+16%), Communication Services (+15%), Consumer Discretionary (+11%) ), the growth Russell 1000 (+10%), gold (+4%), and the S&P 500 (+4%).
Meanwhile, energy and crude oil saw declines of 11% and 14%, respectively. Oil prices fell to their lowest level since December 2021 due to weaker fundamentals and broader market concerns. The bottom of the market will depend on OPEC+ and the United States.
In terms of risk-adjusted returns, which are measured by the Sharpe ratio, the flagship coin also showed strong performance with a score of 1.9. That’s more than information technology (1.5), the Nasdaq (1.4) and healthcare (-1.1).
Bitcoin’s recent price surge has been attributed to the growing likelihood that the US Federal Reserve will eventually abandon its hawkish monetary policy.
The cryptocurrency has risen 35% since March 10, when regulators shut down Silicon Valley Bank.
Despite market analysts’ warnings of a possible correction, Bitcoin’s rebound was stronger than that of Wall Street stocks, catching investors’ attention.
The implosion of Terra, FTX, and Celsis 3AC along with global monetary tightening hurt investor confidence in cryptocurrencies in 2022, with Bitcoin undergoing a massive correction.
However, Bitcoin ended the week with a gain of 34, the best since January 2021, amid the ongoing banking crisis, indicating a narrative shift in perception of the biggest cryptocurrency.
The crypto rally during the ongoing banking crisis has been welcomed by desperate cryptocurrency investors after a brutal bear market, and some of them have suggested there is a shift in how Bitcoin is viewed. Nevertheless, the value of Bitcoin is still largely affected by changes in inflation rates and decisions made by the Federal Reserve regarding interest rates.
