Amidst the retreat of the bitcoin price from one year to the next, the performance of the first cryptocurrency outstrips several traditional stocks such as PayPal, Facebook or the Nasdaq index, analyst Will Clemente noted in a tweet on Wednesday. The analyst cites Shopify and Netflix among the worst performers of 2022, with drops of up to 60%, while the decline in bitcoin's yield is 11,6% at the time of writing.
Both traditional stocks and the price of bitcoin have been affected by the geopolitical situation exacerbated by the Russia-Ukraine conflict. Also, from the Federal Reserve rate hikes that began in March and at least 5 more hikes are expected in 2022.
Stocks included in the S&P 500 and Dow Jones indices were less affected than bitcoin, with declines of 7,16% and 3,76%, respectively. However, the tech stocks of the Nasdaq index (Nasdaq shares) are down by 15,56%, four points higher than bitcoin.
As long as bitcoin, which is trading at around $ 42.000 on Thursday, April 21, continues to rise, the outlook for the first cryptocurrency may improve compared to traditional stocks.
Bitcoin is a better investment than businesses that invest in bitcoins
In the bull phase of bitcoin that peaked in November 2021, MicroStrategy-led bitcoin-investing firms and bitcoin-related firms did well in the stock market as well, as their respective share prices recorded a growth on par with the price of BTC. As the BTC price corrected, bitcoin-related companies experienced larger percentage drops than the bitcoin price.
According to the Wall Street Journal, bitcoin-related companies have lost up to 60% this year. Where bitcoin loss is 11% over the same period, Coinbase fell 42%, while Riot Blockchain fell 34% over the same period. The market capitalization of public companies investing in bitcoin, which was $ 100 billion, has dropped to $ 40 billion.
MicroStrategy, for example, began the trend of investing in bitcoin as part of its strategic reserve in August 2020, and continues to invest in cryptocurrency. Since the beginning of the year, MicroStrategy has dropped almost double bitcoin, by 21,18%. In a similar situation, albeit with a more pronounced drop is Block (formerly known as Square), a company founded by Jack Dorsey, reflecting a 33,41% loss so far this year.