Bitcoin has outpaced traditional investment assets and sectors, such as technology and gold, in year-to-date (YTD) absolute returns and risk-adjusted performance, according to recent data from Goldman Sachs.
The leading cryptocurrency has gained 51% in YTD absolute returns, surpassing information technology (+16%), communication services (+15%), consumer discretionary (+11%), Russell 1000 Growth (+10%), gold (+4%), and the S&P 500 (+4%). Meanwhile, energy and crude oil have seen declines of 11% and 14%, respectively. Oil prices have dropped to their lowest level since December 2021 due to softer fundamentals and broader market concerns. The market’s floor will depend on OPEC+ and the US. In terms of risk-adjusted returns, which are measured by the Sharpe Ratio, the bellwether coin has also demonstrated strong performance with a score of 1.9. This is higher than information technology (1.5), Nasdaq (1.4), and healthcare (-1.1).
Bitcoin’s recent surge in price has been attributed to the growing likelihood of the US Federal Reserve eventually ditching its hawkish monetary policy. The cryptocurrency has increased by 35% since March 10, which was when regulators shut down Silicon Valley Bank. Despite the warnings from market analysts of a possible correction, Bitcoin’s rebound has been stronger than that of stocks from Wall Street, gaining the attention of investors.