Bitcoin underperforms stocks, gold for the first time since 2018
Gold and stocks have underperformed in 2022, but the year has been difficult for Bitcoin (BTC) investors, in particular.
Bitcoin’s price looks prepared to close 2022 down nearly 70% — its worst year since the crypto crash of 2018.
BTC’s depressive performance can be explained by factors such as the United States Federal Reserve hiking interest rates to curb rising inflationary pressures followed by the collapse of many crypto firms, including Terraform Labs, Celsius Network, Three Arrows Capital, FTX and others.
Some companies had exposure to defunct businesses, typically by holding their native tokens. For instance, Galaxy Digital, a crypto-focused investment firm founded by Mike Novogratz, confirmed a $555 million loss in August due to holding Terra’s native asset, LUNA, which has crashed 99.99% year-to-date (YTD).
The above catalysts have prompted Bitcoin to drop 65% year-to-date.
Meanwhile, the U.S. benchmark S&P 500 has plunged nearly 20% YTD to 3,813 points as of Dec. 28. That puts the index on its biggest calendar-year drop since the 2008 economic crisis. The bloodbath has proven to be worse for the tech-heavy Nasdaq Composite, down 35% YTD.
High-profile losers include Amazon, which has crashed approximately 50% YTD, as well as Tesla and Meta, whose stocks have dropped nearly 72.75% and 65%, respectively. As it looks, tech stocks and Bitcoin have suffered similar losses in 2022.
Just as with Bitcoin, the Fed’s rate hikes remain the most-critical factor behind the U.S. stock market’s underperformance. But whether a tighter monetary policy would cause an economic recession in 2023 remains to be seen.
This uncertainty has driven capital toward the U.S. dollar for safety, with the U.S. Dollar Index (DXY), a barometer to
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