Bitcoin makes another new all-time high
Bitcoin makes another new all-time high; rising interest rates and a strengthening dollar give traditional markets pause
The crypto bull market continued into early March with bitcoin (BTC) setting another new all-time high at ~$61k on the 13th of March.
As of the end of March, bitcoin was up +31% for the month. Ethereum (ETH) slightly outperformed bitcoin in March (+36%) and has pushed above $2100 in early April to set a new all-time high. Both bitcoin and Ethereum are now well over 1,000% over the last two years with Bitcoin (+1,347%) slightly outperforming Ethereum (+1,323%) over that time period.
Traditional asset markets in general were mixed in February, with stocks up (S&P500 +4.3%). The US dollar continues to strengthen and turned in its best performance in recent months, up 2.6% for the month.
February’s big losers continued underperforming in March, with long-dated US treasuries down a whopping -5.3% and gold dropping significantly as well at -2% for the month.
Table 1: Price Comparison: Bitcoin, Ethereum, Gold, US Equities, Long-dated US Treasuries, US Dollar (% Change)
We continue to closely monitor gold’s weakness. Gold investors transitioning some (or all) of their gold portfolio into “digital gold” is a major potential source of support for sustained bitcoin price strength.
As we commented last month, gold’s continued price slide may be in part related to a firmer dollar and increase in bond yields in recent months as these traditionally draw investors away from the yellow metal. However, we also continue to see evidence of more investors coming around to accept bitcoin as an alternative to gold, albeit one with more functionality and potential upside.
The macro environment and crypto adoption fundamentals continue to remain strong for further crypto asset price appreciation.
However, we would also sound a note of caution around current market conditions in crypto, particularly for cryptoassets with significant valuations that have yet to demonstrate fundamental traction / product-market fit.
While the combined value of all listed crytpoassets on CoinMarketCap has climbed to nearly $2 trillion, this threshold is not surprising to many given the view that both bitcoin (BTC) and ethereum (ETH) would reach the $1 trillion total market value level. Indeed, bitcoin achieved that level earlier this year and Ethereum is about 25% of the way to the $1 trillion mark.
What raises more of an eyebrow is all listed cryptoassets in the top-100 rankings by market capitalization being valued at or above the $1 billion mark, including “projects” only weeks old.