Author: Matt Hougan, Chief Investment Officer of Bitwise; Translated by: AIMan@Jinse Finance
There is a notable fact: Bitcoin has maintained a flat price over the past month.
When I wrote this memo on April 14, Bitcoin was trading at $84,379. A month ago, its price was $84,317. This means a return of 0.07% over 30 days.
Think about it.
From the United States establishing a Bitcoin strategic reserve to President Trump imposing tariffs on the entire world, the cryptocurrency market has been hit by absolutely massive impacts from all sides, yet our development has completely deviated from the previous trajectory.
When I think about the time, effort, and anxiety I spent researching the market over the past 30 days, I want to cry.
But at the same time, Bitcoin's recent performance has also impressed me. The US stock market peaked on February 19 and has since fallen 12.0%. Bitcoin fell 12.4% during the same period.
This is markedly different from previous market corrections.
The last time the stock market entered a correction was in 2022, when the S&P 500 fell 24.5% between January 3 and October 12. During this period, Bitcoin fell 58.3%.
Before that, when the COVID-19 pandemic first broke out in early 2020, the S&P 500 fell 33.8%... Bitcoin fell 38.1%.
Going further back, at the end of 2018, when the US-China trade war escalated, the stock market fell 19.36%. Bitcoin fell 37.22%.
In fact, since Bitcoin broke the $1 mark in 2011, it has never outperformed the stock market during a comprehensive market correction. But this time, I believe it has a chance.
Critics will point out that chasing stock performance during an economic downturn is different from serving as a hedge asset, and that gold has performed better than Bitcoin in this correction. This is true.
Others might note that the stock market may not have bottomed out yet, or that it has rebounded in recent days (like Bitcoin). (To be more timely, I used data up to the publication date today.)
But none of this can obscure a more important point: Bitcoin currently looks very resilient. The world is falling apart, yet Bitcoin is trading above $80,000. If this doesn't give you confidence in its durability, I don't know what will.
Bitcoin is Growing Before Our Eyes
You might ask: Why is this happening? I believe this is a sign of Bitcoin's maturity.
What makes Bitcoin unique is that its returns are driven by two forces that can sometimes be in opposition.
Risk Asset: To some extent, Bitcoin is a risk asset: an emerging, technology-driven investment that has historically brought high volatility along with high returns.
Hedge Asset: On another level, Bitcoin can play a role similar to gold, hedging against macroeconomic policy mistakes and fiat currency depreciation.
In Bitcoin's early days, the "risk asset" element dominated. Bitcoin's success was highly questionable, so when the market entered "risk-off" mode, Bitcoin would be hit hard, falling even more than stocks.
Today, as more enterprises and institutions buy Bitcoin, and more governments adopt it as a strategic reserve, the "hedge asset" narrative is becoming more popular. Investors are increasingly viewing it as digital gold. The result is that Bitcoin's beta is lower than stocks during market downturns.
No one can guarantee this relationship will continue, nor can they ensure that the remarkable strength we've recently seen in Bitcoin will persist. But so far, things look quite good.
Our child is growing up and becoming an important asset. This is something to be grateful for.
