Bitcoin Outperformed Three National Currencies This Year
Despite the huge decline in price since December last year when Bitcoin hit its all-time high of $20,000 USD, the cryptocurrency was still able to outperform three national fiat currencies this year.
The director of research at a New York-based investment advisory company called Pension Partners has recently published a chart comparing the returns of Bitcoin with reserve currencies from all over the world and it looks like Bitcoin fared better than the Venezuelan bolivar, the Sudanese pound and Argentine peso.
Bad For Bitcoin But Even Worse For Argentina, Venezuela and Sudan
2018 was a bad year for Bitcoin, there is no way around that. It was the third worst year for the token, only better than the major drops that happened in 2012 and 2014. Still, Bitcoin fared much better than some national currencies around the world, so this is something very important to remember. Bitcoin, EOS and Vechain outperformed well compared to other cryptos, too.
The Turkish lira has fallen by more than 50 percent this year and recorded a record 44 percent loss against the US dollar after the US government tightened its sanctions against the country and basically excluded the region from the global financial system.
In South America, the Argentine peso and the Venezuelan bolivar had a massive decline as their prices spiked due to hyperinflation. In the case of Venezuela, the current president of the country, Nicolas Maduro has officially announced that it would replace the national currency with a state-backed crypto called Petro to prevent more inflation, which is at its all-time high there.
While it is expected that the prices will recover on the cryptocurrency market, the same simply cannot be said by some of these national currencies. While there is some hope for the Argentine peso, for instance, the same cannot be said the currency of Venezuela.
For instance, the demand for Bitcoin has not fallen during 2018 as many institutional investors are interested in the token. According to the eToro CEO, Yoni Assia, emergent technologies often see price swings like this in their early days, but the prices tend to stabilize after some time as the markets start to get more adjusted and the industry gets more robust.
Stabilization Of Bitcoin
It looks like the price of Bitcoin is already starting to stabilize. During a 14-month period, the token had its period of least volatility recently which might indicate that the involvement of large-scale investors and institutions is good for Bitcoin.
As this emerging asset class grows, it looks like the lack of correlation between Bitcoin and the broader financial market will increase and that many cryptos will outperform national cryptos in the years to come.