Fact Check: Bitcoin Is One Of This Year’s Worst-Performing Asset Classes. Photo: Studio shot of gold-plated Bitcoins and dollar bills, Kiev, Ukraine, Sept. 22, 2017
Bitcoin could be one of this year’s worst-performing assets judging by its returns for volatility, according to a Bloomberg report.
The largest cryptocurrency in the world has had one of the roughest rides this year, rising as much as 121 percent to a record high of nearly $65,000, before it scaled back to about 13 percent so far this year. It was trading at $32,447 as of this writing.
The bitcoin price almost halved to $33,500 from mid-April through the end of June amid a broader cryptocurrency sell-off that has dragged other crypto-linked stocks lower.
With these year-to-date gains, bitcoin is now one of the worst-performing digital assets this year so far as it continues to underperform every bounce.
The decline was due in part to regulators in China and across the world cracking down on digital assets. China banned bitcoin mining activities, forcing several crypto companies to move abroad, mainly to Kazakhstan or the U.S.
The cryptocurrency rout has pushed more investors to hold more of the digital assets dogecoin – the meme token that was started as a joke — than bitcoin or ethereum, the two largest cryptocurrencies by market capitalization, according to popular crypto brokerage eToro.
Listen to GHOGH with Jamarlin Martin | Episode 74: Jamarlin Martin Jamarlin returns for a new season of the GHOGH podcast to discuss Bitcoin, bubbles, and Biden. He talks about the risk factors for Bitcoin as an investment asset including origin risk, speculative market structure, regulatory, and environment. Are broader financial markets in a massive speculative bubble?
The year-on-year bitcoin gain is however still high at 260 percent and more than 240 times higher than where it was 10 years ago.
The crypto asset has also done better than gold and U.S. Treasuries but it performed worse than anything in the equity sphere, based on the Sharpe Ratio which adjusts the returns of an asset for volatility.
The recent crash in the bitcoin price has raised concerns that the enthusiasm of institutional investors could wane.
In May, analysts at JPMorgan flagged “continued retrenchment” by big players. “Institutional investors appear to be shifting away from bitcoin and back into traditional gold, reversing the trend of the previous two quarters,” they said in a note.
