Bitcoin has demonstrated its resilience amidst recent turmoil in the US banking system, outperforming other digital assets since February, according to a recent Coinbase report. The cryptocurrency’s dominance as a percentage of total crypto market cap increased from 43.9% to 47.7% during March, and its outperformance accelerated in early March, coinciding with the onset of the US banking system’s turmoil.
Part of the reason for bitcoin’s success is its store-of-value properties, according to the report. The stress in the banking system reinforced the cryptocurrency’s perceived value as a safe haven asset, especially since BTC exists mainly outside of the traditional financial system. Additionally, investors have been drawn to bitcoin due to concerns about the regulatory status of other digital assets.
Bitcoin’s correlation to the S&P 500 stock index has also decreased to 25% at the end of March, down from a peak of 70% in May last year. This suggests that bitcoin has started to decouple from traditional markets, strengthening its case as a hedge against economic instability.
The report further highlights that bitcoin has outperformed its digital asset peers in terms of market capitalization growth, with the cryptocurrency market cap growing by $577 billion since the start of the year, with bitcoin accounting for over half of this growth.
In terms of adoption, bitcoin’s use as a medium of exchange continues to grow. The number of merchants accepting bitcoin payments has been increasing, with companies such as Tesla and PayPal joining the trend. Furthermore, institutional adoption of bitcoin has been on the rise, with companies like MicroStrategy and Tesla investing in the cryptocurrency.
The report concludes that bitcoin’s resilience and outperformance amidst recent market turmoil is a testament to the cryptocurrency’s growing maturity as an asset class. While there may be short-term volatility, bitcoin’s fundamentals remain strong and its use cases continue to expand, making it an attractive investment option for many.
Overall, the report highlights how bitcoin’s resilience and outperformance have demonstrated the cryptocurrency’s growing value as a hedge against economic instability and as an alternative store of value. It further emphasizes how bitcoin’s expanding adoption across various industries is indicative of the cryptocurrency’s growing maturity as an asset class.