Bitcoin Officially Outpaces the DOW Jones, Out Battles Every Single Stock Over the Course of 2019
It's been an allegedly ‘Historic' first quarter for the Dow Jones Industrial Average, or the DJIA to use its commonly applied acronym. This industrial average consists of tracking approximately 30 of the largest companies based in the United States, and has officially staged an incredible rally over the beginning of this year, rising by a total of 12 percent.
But while the industrial average has sported a spirited rally for the first quarter of this year, Bitcoin is working to overshadow it in very significant way.
According to recent statistics, and the newfound rally over the course of April has managed, on its own, to surge by 40 percent, has also managed to outperfom every single stock visible on the Dow Jones Industrial Average
To put this boom into more straight forward terms, Bitcoin has enjoyed a year to date gain of 44 percent according to trading metrics this week. In contrast, the Dow Jones has effectively been trading sideways by contrast.
Bitcoin Effectively Leave Dow Industrial in the Statistical Dust
From what we can see from the statistics from above, Bitcoin has managed to increase its value by 44 percent over the last few weeks. This increase is in stark contrast to the Dow Jones' increase of 12 percent.
For the DJIA, this is a very impressive turn of events, considering the number of companies listed on the platform. To put this rebound into perspective, with the first quarter of this year concluded, the Dow Jones has already managed to overtake the average stock market return on a year on year basis of 10 percent.
While this is impressive for the Industrial Index, Bitcoin has managed to overshadow it by a long margin, and has worked to make the Dow's market rally look relatively weak by comparison. We do need to take into consideration that this is largely due to the larger volume of investors, as well as bonds and securities markets that are involved in industrial averages like these.
Over the course of Wednesday, Bitcoin had managed to land on a year-long high, putting it very close to the sought after $5,500 value margin on the Bitstamp Coin exchange. Thus illustrating the 44 percent bull run which began at the start of this year.
In a Tweet from @CCN Markets this week, Bitcoin has managed to rebound in spite of China FUD, allowing it to strike the $5,500 margin over the month.
“Bitcoin Price Spikes Within Inches of $5,500 Despite China FUD”
Bitcoin Officially Beats out Apple, IBM, Including Microsoft
So while we have taken a broad look at the Bitcoin rally, it's worth taking it into better perspective, and the only way to solidly do it is to explore the Dow Jones. The Dow Jones Industrial Average is made up of approximately thirty US Based companies, including a number of well-established names such as Apple, Disney, Goldman Sachs and McDonalds.
But even though these are well known, internationally acknowledged companies, not a single one of them had the ability to surpass or even get close to the kinds of gains that Bitcoin managed over this year so far.
Out of all the companies that make up the Dow Jones, the biggest performer was Cisco, which had managed a year to date increase of approximately 28 percent. Compared to others, Apple was the second strong performer, rising by 27 percent, followed closely by IBM with 25 percent and United Technologies, with an increase of 23 percent in spite of initial setbacks.
Even with this season being a spectacular bull run for the likes of Visa, Nike, and Intel, they are still unable to match the comparative rise of Bitcoin.
Less Disparity and More Correlation From Bitcoin and Dow?
For some time, Bitcoin has gained a reputation as being a non-correlated asset when compared to more conventional stocks traded, this is what sets it apart as an asset for the more anti-establishment investor.
While this was the initial case, Bitcoin serves as a means to diversify outside of conventional stocks, which is especially useful when stocks hit crises of volatility. There is an outlying fear that Bitcoin is starting to lose this outsider advantage, however.
“Beware: The Bitcoin Might Blindly Chase the Dow in the Next Financial Crisis.”
While more institutional investment steadily start to pour into the world of cryptocurrencies like Bitcoin, this immunity to conventional stock changes and volatility may in fact change over time. CCN went on to report that Wall Street investors would be better disposed to treat cryptocurrencies as a kind of ‘risk on' virtual asset, similar in style to stocks.
Alex Kruger, serving as an economist, gives some insight into this new approach towards Bitcoin:
“IMO crypto will behave like a highly correlated high-beta asset class. Not where you go to for diversification purposes.”
With this theory steadily starting to gain more and more credence with the movements of Bitcoin and conventional stocks recently. Does this indicate a longer term trend of Bitcoin mirroring the behaviour of the Dow Jones, resulting in correlated gains over the course of 2019?
Will the Bitcoin Rally Continue Over This Year?
Financial analysts remain divided on whether or not the uptick in the value of Bitcoin overseen over April will continue and become a longer-term bullish trend for investors.
Analysts that believe in a more bullish turnout for Bitcoin, point to the record volumes tracked on markets for Bitcoin futures, as well as the perceived imminent break in the 200 day simple moving average of Bitcoin.
While there is certainly ample evidence for those believing a bullish trend is imminent, there is ample room for those that are not otherwise convinced. An analyst for Bloomberg believes that bullish Bitcoin traders are effectively ‘grasping at straws' in thinking there will be an uptick in its value.
Instead, the analyst argues that there is likely to be a 65 percent correction in the foreseeable future.