25 Apr 2022
Gold has crushed bitcoin so far in 20222022 has started with a risk-off sentiment in the financial markets, leading physical gold to outperform the “digital gold”.
Source: Tradingview (Coinbase, S&P 500, Nasdaq, TVC)
Bitcoin started the year terribly, plummeting more than 25% in the first three weeks. It has since somewhat recovered in its typical volatile fashion but is still down 18% in 2022.With its 19% decline so far in 2022, Nasdaq has, by a small margin, underperformed against bitcoin. This is surprising given that bitcoin has tended to follow Nasdaq, albeit with higher volatility.While investors have sold off parts of their stocks and crypto holdings in 2022, bracing for higher interest rates and more hawkish monetary policies as inflation runs rampant, gold has served its function as a safe haven asset and is up 4%.We see the same risk-off patterns in the currency market. The US Dollar Index (DXY) is up 7%, indicating that global investors seek the US Dollar as a fiat safe haven amid increasing geopolitical uncertainty.Last week we explained how bitcoin's 30-day correlation with the Nasdaq is sitting at highs not seen since July 2020, while bitcoin's correlation to gold has reached all-time lows.Bitcoin's strongest narrative during 2020 and large parts of 2021 was that of digital gold, as the asset was uncorrelated with most other major asset classes. The recent placement of bitcoin into the risk-on basket is hard to swallow for many bitcoin investors.