Bitcoin’s performance in 2021 has thus far been a tale of two quarters. In Q1, Bitcoin enjoyed the best start to a year in eight years, outperforming traditional asset classes with returns of over 100%. Of late, however, much of the wind has been knocked from Bitcoin’s sails as Q2 has been the worst on record in eight years.
How Does Bitcoin’s Performance Compare to Previous Years?
Relative to past performance, Q2 appears to be somewhat of an anomaly. Over the past eight years, there have only been two quarters that have recorded negative returns. Bitcoin’s returns of -40.03% in Q2 2021 are by far the worst in eight years, the next closest being -6.7% in 2018.
Ethereum Has Outperformed Bitcoin in 2021
It is often stated that other cryptocurrencies, relative to Bitcoin, tend to outperform on both the upside (during bull markets) and downside (during bear markets). Thus far, 2021 doesn’t appear to be following that pattern, particularly when it comes to Ethereum.
Compared to Bitcoin, Ethereum has enjoyed a better year to date with returns of 162% in Q1 and just under -5% in Q2.
Bitcoin Markets Remain Uncertain
For the time being, the market appears to be on edge, despite bullish announcements such as MicroStrategy moving to acquire up to an additional US$1.5 billion in Bitcoin.
While not an exact science by any measure, the Fear & Greed Index below suggests we have a way to go before sentiment can be said to have shifted in a positive direction.
While the short-term downward moves are cause for concern among long traders, particularly those using leverage, many Bitcoiners remain undeterred.
Volatility, in their eyes, is to be expected of an emergent store of value on a price discovery path towards global adoption. In the interim, they simply #stacksats, HODL and repeat the mantra, BTFD.
There are top analysts however, that are predicting BTC will hit $160k by the end of 2021.
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