In times of macro turmoil, Bitcoin has proven to be a resilient asset, outperforming altcoins in the market.
Despite recent downtrends, data shows that Bitcoin has held up better compared to indexes and other cryptocurrencies.
While some indexes have experienced double-digit losses, Bitcoin only suffered a 4% loss.
This performance highlights Bitcoin's ability to weather economic storms and maintain stability.
In this blog post, we will analyze the data behind Bitcoin's success during macro turmoil and explore why it outperforms altcoins in these challenging times.
Bitcoin's Performance in Macro Turmoil
Bitcoin has proven to be a better performer than altcoins in the face of macro turmoil.
While indexes have experienced double-digit losses, Bitcoin has only suffered a 4% loss, making it the top-performing index.
On the other hand, altcoins like those in the Small Cap Index have been hit the hardest, losing more than twice as much as Bitcoin.
In times of uncertainty, investors tend to move towards safer assets such as Bitcoin and stablecoins.
Speaking of stablecoins, they have gained market share and now account for 9% of the entire crypto market cap.
Bitcoin Holds Up Better Than Indexes
Bitcoin has proven to be a better performer than indexes during times of market turmoil.
While both bitcoin and indexes have experienced losses, bitcoin has held up better with only a 4% loss compared to double-digit losses seen in some indexes.
The Small Cap Index, which includes altcoins that are still establishing themselves, suffered the most significant losses, while stablecoins like USDT and USDC emerged as safe havens for investors seeking stability amidst market uncertainty.
Comparison of Bitcoin and Indexes' Losses
Examining losses experienced by Bitcoin during market downturns reveals its resilience compared to major indexes.
While both Bitcoin and indexes have suffered in recent downtrends, Bitcoin has held up better, with only a 4% loss compared to double-digit losses seen by some indexes.
This performance demonstrates that Bitcoin is a more stable investment option during times of turmoil.
Comparing the volatility of altcoins to Bitcoin further highlights this trend.
The Small Cap Index, which consists of smaller and riskier altcoins, experienced losses on par with the Mid Cap Index.
Meanwhile, stablecoins like USDT, USDC, and BUSD have emerged as safe havens for investors seeking stability amidst market uncertainty.
Overall, the data shows that Bitcoin outperforms altcoins in macro turmoil due to its ability to withstand market pressures and maintain value better than major indexes or smaller cryptocurrencies.
Bitcoin as a Safe Haven
Data says Bitcoin holds up to macro turmoil better than altcoins:
Despite recent market stress caused by various social issues, Bitcoin has demonstrated greater resilience compared to altcoins.
While both Bitcoin and indexes have experienced losses, BTC has outperformed indexes with only a 4% loss.
In contrast, some indexes saw double-digit losses.
Comparing performance against different index categories:
The Large Cap Index returned an 8% loss, while the Mid Cap Index suffered a double-digit loss of 14%.
The Small Cap Index, consisting of smaller altcoins still establishing themselves in the market, experienced similar losses to the Mid Cap Index at 14%.
Stablecoin dominance amid flight-to-safety:
During periods of increased uncertainty, investors tend to move their holdings toward safer assets like Bitcoin and those within the Large Cap Index.
However, stablecoins have emerged as winners in this market environment due to their pegged value and reduced volatility.
Stablecoins such as USDT, USDC, and BUSD now account for 9% of the total crypto market capitalization.
Altcoins' Performance in Macro Turmoil
Altcoins in Macro Turmoil: The Small Cap Index, consisting of smaller and riskier altcoins, took the biggest hit during the recent market turmoil.
With losses on par with the Mid Cap Index at 14%, these altcoins struggled to hold their ground.
In contrast, Bitcoin outperformed both indexes with only a 4% loss, proving its resilience in tough times.
Stablecoin Dominance: As investors sought safer assets during market uncertainty, stablecoins emerged as winners.
These cryptocurrencies pegged to the US dollar provided a haven for those looking to ride out the storm without converting their holdings to fiat currency.
Now accounting for 9% of the total crypto market cap, stablecoins like USDT, USDC, and BUSD have gained significant traction and dominance in this volatile landscape.
Small Cap Index and Altcoin Losses
The Small Cap Index, consisting of smaller altcoins, has experienced significant losses during times of market turmoil.
These coins are more volatile and prone to drastic price fluctuations.
Additionally, investors have less confidence in these smaller cryptocurrencies compared to established ones like Bitcoin.
This lack of trust contributes to the higher susceptibility of small-cap altcoins to market manipulation.
Source: Arcane Research
Flight-to-Safety and Bitcoin Dominance
Bitcoin's reputation as a store of value during economic uncertainty has been reinforced by recent data.
Investors seeking a safe haven asset have flocked to Bitcoin, which has demonstrated better resistance to market turmoil compared to altcoins.
With established market dominance, Bitcoin remains the top performer even amidst double-digit losses suffered by other indexes and cryptocurrencies.
Stablecoins as a Market Share Winner
Increased demand for stablecoins in times of instability is evident as investors seek security and stability amidst market turmoil.
The price stability offered by stablecoins has attracted investors, particularly those looking for a safe haven during uncertain times.
Moreover, the use cases for stablecoins have expanded beyond traditional trading, further contributing to their growing market share.
With their peg to the US dollar and lower volatility compared to other cryptocurrencies, stablecoins like USDT, USDC, and BUSD now hold 9% of the total crypto market cap.
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