Is Bitcoin Price Outperforming Gold And NASDAQ This Cycle?

The current state of the Bitcoin price is causing excitement among investors as it appears to be on the brink of entering a euphoric phase of price action following a strong bull market. However, a closer look at the data raises questions about whether Bitcoin is truly outperforming other assets and historical cycles or if it may be underperforming in comparison.

When examining previous Bitcoin price cycles, the growth since the cycle lows chart shows promising returns of around 634% from the lows of the last bear market. These gains are supported by strong fundamentals, including institutional accumulation and on-chain data indicating long-term holders are not selling. This sets the stage for a potential strong run-up late in the bull cycle, similar to previous cycles.

In the current Bitcoin price cycle, the USD price chart reflects a stable trend with a relatively mild retracement of around 32%. This stability, characterized by a “step-up” pattern of sharp rallies followed by consolidation, suggests reduced volatility but also potentially reduced upside potential. Fundamentally, the market remains robust, with strong institutional support.

When comparing Bitcoin’s performance against assets like US tech stocks and Gold, a different picture emerges. Bitcoin’s performance in this cycle may appear less spectacular when measured against high-growth, speculative assets like US tech stocks. Additionally, Bitcoin has yet to surpass its previous all-time high from the 2021 peak when measured in Gold terms, indicating underperformance compared to holding Gold.

Adjusting the Bitcoin vs Gold chart for Global M2 money supply expansion paints an even more sobering picture, showing that Bitcoin’s cycle peak price in “liquidity-adjusted Gold” terms is still below the prior peak. This suggests that much of this cycle’s rally may have been driven by fiat debasement rather than pure outperformance.

While Bitcoin’s bull market has shown impressive gains in dollar terms, the performance against assets like US tech stocks and Gold, as well as when adjusted for Global Liquidity expansion, reveals a less extraordinary performance. Investors should closely monitor these ratio charts for clues about the potential direction of the bitcoin price in the future.

In conclusion, while there is still room for significant upside potential, investors should consider the relative performance of Bitcoin against other assets and the impact of global liquidity expansion on its purchasing power. By staying informed and analyzing these factors, investors can make more informed decisions about their investments in Bitcoin.