- In March, both Bitcoin and the US stock market took a hit because of the massive outbreak of coronavirus.
- However, in 2020 Q1, BTC declined less than S&P 500 and Dow Jones indexes, which represent the US stock market.
- JPMorgan Asset Management has warned investors that they shouldn’t hurry and buy stocks because the worst is about to come.
Due to the massive outbreak of COVID-19, March had been the worst month for Bitcoin since its all-time highs two years ago. Nevertheless, the crypto has managed to outperform the US stock market in the first quarter of 2020. The popular cryptocurrency declined less than S&P 500 and Dow Jones indexes, which represent the US stock market. However, when the crash accelerated, Bitcoin showed some correlation with the two indices. This made investors doubt if it’s indeed a safe haven, or not.
In the first three months of this year, Bitcoin fell about 10%, from $7,200 to $6,350. Dow, on the other hand, saw the worst quarter so far – falling by over 23%. Meanwhile, S&P 500 tumbled by 20%, which is the biggest quarterly loss since 2008.
On March 12, the crypto market lost around $90 billion of its total value and Bitcoin plummeted by almost 50%. Since then, BTC has managed to recover a good portion of its losses and has detached from traditional markets.
Luno exchange’s executive, Vijay Ayyar, told CNBC:
Bitcoin is still a relatively smaller asset class that is increasingly uncorrelated to traditional asset classes and this is in the process of being established as we speak. This is why I believe the current market environment is a big test for Bitcoin and given how young the asset class is, it has actually held up quite well.
It’s worth noting that the stock market hasn’t recovered despite the recent gain driven by cash injections. It looks like this is only the beginning of a crisis with Donald Trump, the President of the US, saying that the country should be ready for a “very, very painful two weeks.” Trump said that the US might see up to 240,000 deaths even if citizens adhere to the social distancing measures.
JPMorgan Asset Management has warned investors that they shouldn’t hurry and buy stocks because the worst is about to come. Strategist Hugh Gimber said:
I’m not yet confident in advocating overweight risk assets positions because you’re vulnerable in that scenario to a deterioration of the news on the medical front. The policy measures have helped but they’re not on their own enough for us to call a definitive bottom