Bitcoin more recession resistant than META, comparison shows
Bitcoin continued to make new lows in the bear market and has essentially failed as an inflation hedge. The ongoing recession-like macro environment has dramatically reduced the price per BTC and the share prices of top tech giants worldwide.
In a direct comparison to the Mark Zuckerberg-owned META, the top cryptocurrency by market capitalization appears to be holding up much better than the social media brand.
Bitcoin flexes better than meta during recession
Bitcoin was born from the ashes of the last great recession. For years, investors wondered what might happen to the speculative asset class of cryptocurrencies when another recession hit, and as of this year, they’ve found out.
Monetary policy tightening by the Fed and interest rate hikes have hurt most asset prices, including the price per BTC. As soon as the US Federal Reserve started talking about interest rate hikes, the stock market and cryptocurrency began to fall.
With the two very different asset classes having been in a bear phase for more than a year now, there is a wealth of data available for comparison. Comparing the top cryptocurrency to some of the most important tech brands results in a shocking discovery: Bitcoin holds up better than META by comparison.
META is the parent company of Facebook, Instagram and other Zuck-owned brands. After betting big on the metaverse, META shares have been in freefall ever since – with one of the steepest selloffs in the entire financial sector.
META (left) compared with BTCUSD (right) | Source: BTCUSD on TradingView.com
What The Zuck? Comparison of past crypto bear market withdrawals
Without even measuring, it is clear that META fell much more heavily than Bitcoin with just a brief visual inspection. From high to current low, both plunged around 77% currently. What is more remarkable is the fact that META stock prices fell back to 2015 levels, while cryptocurrencies are trading at the higher end of 2017 and 2018 prices.
However, compared to previous bear markets, BTC may still have a way to go. The first ever bear market resulted in a 94% decline, while the 2015 bear market took 86% of the price per coin from top to bottom. In 2018, BTC only fell 84%, showing a trend of diminishing returns, much like diminishing returns.
The data may also suggest that because volatility decreases over time, withdrawals will become less and less severe with each successive bear market. What the data does not explain is why META fell so significantly compared to the speculative asset class.
Compared to other top cryptocurrencies, Bitcoin has also come out as the least battered and battered during the bearish trend. Ethereum wiped out 82% of its face value, while metaverse tokens like Decentraland lost 94% and counting.
Considering that BTC is holding up well against all other cryptocurrencies and even some top tech stocks, the first cryptocurrency of all time is showing more resilience than expected during its first ever recession.
$METAone of the largest publicly traded technology companies and the parent company of some of the biggest brands in the world (FB, IG, etc.) fell the same amount at $BTC yet #META fell back to 2015 prices, while BTC only fell to 2017/2018 prices. Why is no one talking about this? #BITCOIN pic.twitter.com/DwoaHRn0lm
— Tony “The Bull” Spilotro (@tonyspilotroBTC) 5 December 2022
follow @TonySpilotroBTC on Twitter or join TonyTradesBTC Telegram for exclusive daily market insight and technical analysis education. Please note: Content is educational and should not be considered investment advice.
Featured image from iStockPhoto, Charts from TradingView.com
