Bitcoin's Underperformance Relative to Stocks Sparks Concern Among Investors
Bitcoin's price has stabilized around $64,000 after briefly dipping below $63,000 over the weekend. Despite this, the cryptocurrency's performance relative to traditional stocks is a concern for investors. According to Glassnode, Bitcoin has underperformed the S&P 500 in two of the last three trading sessions and has only outperformed the index on about one-third of trading days over the past three months.
The contrast with crypto-linked stocks is stark, with many falling by as much as 3% in pre-market trade. Strategy (MSTR) stock, for example, has declined nearly twice as much as Bitcoin over the past year. This is significant because MSTR's investment case is closely tied to its Bitcoin holdings.
The divergence between Bitcoin and traditional stocks can be attributed to broader market pressure rather than crypto-specific news. Oil prices have climbed due to flaring tensions in the Middle East, while Treasury yields have risen alongside oil, hitting high-beta, sentiment-driven stocks like crypto treasuries harder than the broader market.