Written by: Matt Hougan, Chief Investment Officer of Bitwise
Translated by: Luffy, Foresight News
Have you noticed this amazing fact: Bitcoin's price has barely changed in the past month?
As I write this memo, Bitcoin is trading at $84,379; a month ago, it was priced at $84,317. This means the return over 30 days is only 0.07%.
The crypto market has been hit by massive shocks from all directions, from the US establishing a Bitcoin strategic reserve to President Trump imposing global tariffs, yet Bitcoin's price remains stable.
Thinking about all the time, effort, and anxiety I've invested in researching the market over the past 30 days, I want to cry.
But on the other hand, Bitcoin's recent performance is admirable. The US stock market peaked on February 19th and has since fallen 12.0%. During the same period, Bitcoin dropped 12.4%. This is notably different from previous market corrections.
The last time the stock market entered a correction period was in 2022, when the S&P 500 fell 24.5% between January 3rd and October 12th. During this time, Bitcoin dropped 58.3%.
Going further back, when the COVID-19 pandemic broke out in early 2020, the S&P 500 plummeted 33.8%... while Bitcoin fell 38.1%.
Even earlier, in late 2018, when the US-China trade war escalated, stocks declined 19.36%. Bitcoin dropped 37.22%.
In fact, since Bitcoin's price broke through $1 in 2011, it has never outperformed the stock market during any market correction. But this time, I believe will be an exception.
Critics will point out that performing on par with the stock market during a downturn does not equate to acting as a hedge asset, and gold performed better than Bitcoin in this correction. This is indeed true.
Others will note that the stock market may not have bottomed out yet, or has slightly rebounded in recent days.
But regardless, a key point cannot be ignored: Bitcoin now appears incredibly resilient. With global situations in turmoil, Bitcoin's trading price remains above $80,000. If this doesn't convince you of its endurance, I don't know what will.
Bitcoin Growing Before Our Eyes
You might ask: Why is this happening? I believe this is a sign of Bitcoin's maturation.
Bitcoin's uniqueness lies in its returns being driven by two sometimes conflicting forces.
Risk Asset: On one hand, Bitcoin is a risk asset, an emerging, technology-driven investment that historically has brought high returns alongside high volatility.
Hedge Asset: On the other hand, Bitcoin can play a role similar to gold, providing a hedge against macroeconomic policy failures and fiat currency depreciation.
In Bitcoin's early days, the "risk asset" attribute dominated. At the time, there was uncertainty about Bitcoin's success, so when markets entered "safe haven" mode, it would be severely impacted, falling more than stocks.
Now, as more enterprises and institutions purchase Bitcoin, and more governments hold it as a strategic reserve, the "hedge asset" function becomes increasingly apparent. Investors view it as digital gold. The result is a reduced beta coefficient relative to stocks during market downturns.
I cannot guarantee this relationship will continue, nor can I confirm that the extraordinary resilience we've recently seen in Bitcoin will persist. But so far, things look quite good.
Bitcoin is growing into a macro asset, which is undoubtedly reassuring.
