Bitcoin Is Turning Less Riskier Than Top Global Assets?

• Bitcoin outperformed other global assets during the US bank run in Q1 2023.
• The number of non-zero BTC addresses hit an ATH of 45,506,505. 

Bitcoin intimidated the global macroeconomy with its recent bullish rally during the US bank runs. During the previous financial crisis and liquidity crunches, the Bitcoin price dipped to bottoms with notable declines. But the 2023 US banking crisis witnessed an initial double-digit surge in BTC. Significantly, it surged 65% year-to-date – from $16.8K to $27.8K.

Consequently, the entire crypto community rejoiced to watch the dominant crypto recover from the bearish troughs. Alongside the consolidation, Bitcoin recorded several other accomplishments outperforming other real-world assets.

Bitcoin Into A “Less Risky” Asset?

Jamie Coutts, a prominent crypto analyst at Bloomberg Intelligence, pointed out two important metrics to support the speculative inference — “Bitcoin becoming less risky.” 

Firstly, it is a significant metric called the “Sortino ratio”  This metric evaluates an asset’s risk-adjusted return with respect to its corresponding downside volatility. Thus, traders often regard it as the pessimistic sibling of the “Sharpe ratio.”

As seen in the above source, Bitcoin recorded a high Sortino ratio surpassing Gold, NASDAQ 100, S&P 500, and other TradeFi-related commodities and equities. The analysis screened multiple cycles with different time windows such as 2013-2022, 2017-2022, and 2022-2023. 

Secondly, Bitcoin’s outperformance is highlighted through the comparative analysis of two metrics — volatility and investment returns — over a 90-day window. 

According to the above graph, BTC became the only asset that exhibited a remarkable reading. That is, its 3-month returns surpassed the 90-day volatility. While all the other assets laid an opposite reading — volatility exceeding gains.

This momentum displayed by Bitcoin in Q1 2023 was highly impressive. When other global assets plunged shortly following the US banking crisis. The report also highlighted the reduction in BTC’s volatility. Over the last 5 years since 2018, its volatility dropped over 54%.

Above all, the analyst stated:

“If Bitcoin is to become a global reserve asset, it must perform during a liquidity crisis. When $BTC rallied 40% into a US banking crisis this year, it was the first time the world’s first decentralized asset outperformed in a serious liquidity stress test.” 

Notably, BTC landed in the 12th position in market capitalization among all other global assets. However, in the long term, the largest cryptocurrency registered a large negative percentile of 39.24% in its 1-year returns.

Positive Bitcoin Adoption Rates

Amid all the concerns and predictions on Bitcoin’s volatility, one more side looked extremely positive. The number of addresses holding more than a single BTC attained its all-time high (ATH) closer to 1 million. At press time, data from lookintobitcoin recorded a count of 992,898. 

Moreover, addresses with a non-zero Bitcoin balance hit an ATH of over 45.5 million. This increase in the accumulation boosts Bitcoin adoption among users globally. 

Bitcoin’s consolidation between $28K to $29K, at press time, induced the hype and anticipation of witnessing the upside breakout at $30K by Easter. At the time of writing, as per CMC, BTC breached the $28K level to trade at $27,927.

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