The first quarter was very successful for the crypto industry. After the stubborn bear market last year, prices shot up considerably. However, the king of cryptocurrencies, bitcoin (BTC) managed to outperform many altcoins. You could already read in the Bitcoin news last week that bitcoin has outperformed other assets such as the S&P 500, the Nasdaq and gold when it comes to price performance in the first three months of the year.
BTC benefits from banking crisis
The crypto market has shown great resilience in the face of recent turmoil in the US banking system, with bitcoin in particular outperforming, Coinbase said in a Friday statement. research report.
The US-listed crypto exchange notes that bitcoin has outperformed other cryptocurrencies since mid-February. With this, BTC’s dominance as a percentage of the total cryrpto market cap has also increased from 43.9% in March to 47.7%. This outperformance accelerated in early March, coinciding with the start of all the turmoil in the US banking system.
The research report also notes that the turmoil in the banking system has strengthened bitcoin’s value-storing properties. In addition, it would hedge are against the current conditions, because BTC mainly exists outside the traditional financial system. Bitcoin was created in response to the financial crisis in 2008. People can be their own bank, making trust in a central party a thing of the past.
Analysts David Duong and Briang Cubellis also wrote that bitcoin benefited from investor concerns about the legal status of other cryptocurrencies and thinner liquidity specific to some BTC versus stablecoin trading pairs.
Bitcoin correlation with S&P 500
BTC’s quarterly results were many times better than those of the S&P 500. Bitcoin ended the first quarter up 73%, while the US stock index was up 5.5% in the first quarter.
Coinbase’s research report noted that Bitcoin’s correlation with the S&P 500 dropped from a peak of 70% last year to 25% on March 30.