The cryptocurrency community can no longer ignore the rapidly widening performance gap between traditional equities and crypto.
Over a multi-week stretch, the S&P 500 climbed an additional 4%. In the meantime, Bitcoin tumbled 13% and gold dropped 5% despite being perceived as safer bets.
Ironically, Bitcoin is performing as a risk-on stock during market corrections and a safe-haven asset when traditional equities rally.
AI mania
The US stock market recorded yet another blockbuster session on Monday. The S&P 500 Index surged to a fresh all-time intraday high of 7,617.66.
The tech-heavy Nasdaq Composite similarly scaled new heights (mostly due to AI spending).
The iShares Expanded Tech-Software Sector ETF notched a 5% gain for the day. Heavyweights like Salesforce, Adobe, Workday, and ServiceNow managed to lock in sizable moves. Software stocks tracked a staggering 14% gain over a three-day period. That's the best three-day performance run since October 2001.
Moving away from crypto
Historically, Bitcoin and gold have competed as main safe havens. However, traditional equities have recently commanded a disproportionate share of incoming investment capital.
Senior macro strategists have noted that Bitcoin is severely failing to keep pace with stocks. Meanwhile, vocal crypto critics argue that the intense risk appetite generated by AI stocks is ironically the only mechanism keeping Bitcoin trading above the $70,000 threshold.
More inflation fears
There are mounting macroeconomic threats despite the euphoria. Global energy markets experienced a sudden shock on Monday.
Both West Texas Intermediate and spot Brent crude jumped sharply higher. The surging oil prices show that energy markets are yet to become less hectic.
Dan Burgin
