Crypto space has outshined other asset classes since July 2022

Crypto has experienced its fair share of ups and downs due to volatile and highly dynamic market conditions. If recent reports are to be believed, then it looks like crypto is gaining traction yet again despite having a hard time in the earlier phases.

July 2022 is a turning point, recording the margin by which BTC and ETH have outperformed other asset classes. They agreed that November was not in their favor, but that did not turn out to be the end of it. The trip has actually continued for ETH to surpass BTC with improvements and for BTC to cement its correlation with US equities for a trip throughout 2023, something that was missing since late December 2021.

At the end of June, ETH was at rock bottom, under pressure to sell its components due to Celsius’s exposure to stETH. Call it a pivot, but ETH made it to the positive side in early July. It goes to the extent of moving much above the performance of BTC.

As for the world-famous BTC, Noelle Acheson believes it remains much more sensitive to the changes happening in the market. Not a coincidence, one might say, considering the level to which it lacks cash flow. It has a solid connection to liquidity simultaneously, making it responsive on every level. 

Another factor that is said to have fueled the correlation of BTC with US equities is the focus of BTC on growing, no matter the situation. While the word growth does sound optimistic, it does little to hide the affiliation with players in the crypto industry, especially during the bullish period. It caused leverage in excessive amounts, only to be later complemented by the exposure to Tesla.

The latter comes as an indirect benefit for doing the job that the community considers a temporary phase of adding more BTC or including BTC for the first time to diversify the digital portfolio. Read our analysis-based price prediction before investing in cryptocurrencies.

One may draft a projection after considering how much decline BTC has suffered against Nasdaq during the US trading hours. There is a slight difference, but BTC is down 23% versus Nasdaq’s 25%, and it is unclear whether the margin will widen in the coming days. Take a hint, either community, because Nasdaq has a better ground with less volatility than the crypto sphere.

The chances of the crypto space continuing to outperform remain high. Consider the cumulative returns that all the classes have generated from July 1, 2022, to February 20, 2023. ETH tops the chart with 61%, followed by BTC and Nasdaq with 29% and 7%, respectively. S&P 500, Gold, and DXY have registered a cumulative return of 7%, 2%, and -1%, respectively.

A lot is yet to happen, but crypto seems to be taking the edge, with BTC and ETH registering the top two ranks.