Bitcoin’s Risk Compared to Stocks
Bitcoin (BTC) and traditional investments like stocks have shown similar chart patterns over the past year. However, recently, Bitcoin appears to be a riskier investment compared to the Dow Jones Industrial Average (DJIA).
Key Points:
- Bitcoin’s risk is currently higher than that of the DJIA, according to Bloomberg’s senior commodity expert Mike McGlone.
- When Bitcoin first breached $30,000 in January 2021, it surpassed the Dow, but now the volatility is about 3x that of the stock index.
- Unless adding a high-volatility asset like Bitcoin improves total returns via diversification, there’s little incentive to add it to a portfolio.
- The correlation between Bitcoin and the Dow is close to its historical high, and there are concerns that a stock market decline could pressure Bitcoin.
Bitcoin Price Analysis:
Currently, Bitcoin is trading at $28,984, with a decline of 0.08% in the last 24 hours, a 1.38% drop in the previous seven days, and a 4.04% loss on its monthly chart.
Hot Take:
The upcoming recession could pose challenges for Bitcoin, which should be outperforming most risk assets but isn’t. This raises concerns about Bitcoin’s performance and its ability to return to its previously predicted trajectory towards $69,000.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative, and your capital is at risk.
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