Key comparative data ahead of the FOMC
Although concerns about a potential economic recession loom over the markets, the cryptocurrency space seems relatively less volatile. Interestingly, the White House had discussed in a blog last week what is the official definition of recession. It is unlikely that the latest decline could mean we are in a recession, it says. This brings up the question of how Bitcoin would perform if the economy were to enter a recession in the future.
Why is Bitcoin’s Second-Worst Growth Still Better?
Amidst all the macroeconomic obstacles and general uncertainty due to serial crypto-related setbacks, Bitcoin has also suffered in recent times. However, Bitcoin’s (BTC) recent decline is still no worse than some of the traditional high-performing assets. According to data from Crypto Compare, the second quarter of 2022 recorded Bitcoins second worst quarterly result in its history.
“Q2 saw Bitcoin (BTC) experience its second-worst quarterly performance in its history. Strikingly, various growth stocks have continued to underperform BTC during this period, even with much lower volatility.”
Is Bitcoin Recession Proof?
Despite such a poor performance during the period, Bitcoin (BTC) trumped some of the major company stocks in the market. Compared to the company’s shares in Peloton, Netflix, Roblox and Snapchat, Bitcoin (BTC) outperformed in the first half of 2022. To some extent, this explains why some of the crypto supporters call Bitcoin recession proof. However, macroeconomic events clearly continue to affect crypto prices from time to time. It remains to be seen whether Bitcoin isolates itself from the macro links.
During the period, Bitcoin witnessed a huge decline in its price. BTC went from a peak of over $47,000 at the start of 2022 to below $20,000 in June. At the time of writing, Bitcoin is trading at $20,886, down 4.52% in the last 24 hours, according to CoinMarketCap. Until just three months ago, the top cryptocurrency was trading around the $40,000 range. Recently, the crypto-asset suffered losses after Elon Musk’s Tesla announced that it was selling 75% of its BTC holdings. The holding was sold to maintain overall liquidity for the company, it explained. However, Musk clarified that his company is open to increasing its Bitcoin holdings in the future.
The content presented may include the author’s personal opinion and is subject to market conditions. Do market research before investing in cryptocurrencies. The author or publication bears no responsibility for your personal financial loss.
