Bitcoin (BTC) defeated by stock returns for the first time in 14 years..."Excess returns are a thing of the past"

▲ Bitcoin (BTC)/AI generated image

The 14-year trend of Bitcoin (BTC) outperforming US stocks has been halted.

According to cryptocurrency media outlet Benzinga on August 5 (local time), the ratio of the S&P 500 index to Bitcoin surpassed its 200-week moving average for the first time since 2012. This is the first signal that US stocks have outperformed Bitcoin over an extended period. The same trend was also observed in the Nasdaq index's ratio to Bitcoin, marking a first in the history of both assets.

Since 2010, Bitcoin has recorded an overwhelming appreciation rate compared to stocks. The Bitcoin ratio equivalent to 1 unit of the S&P 500 index decreased from over 300 BTC in 2012 to approximately 0.12 BTC. While stocks have temporarily outperformed Bitcoin in the past, the gap quickly reversed. This time, the difference is clear in that stock dominance has continued for a prolonged period.

CoinDesk interpreted this as a sign that the era of Bitcoin generating overwhelming excess returns compared to stocks is waning. Claims of Bitcoin being a superior store of value and aggressive price predictions made during past bull markets are also being tested, it assessed. From an opposing perspective, it was analyzed that Bitcoin has entered a mature stage where explosive growth, as seen in the past, has become difficult as it has grown into a major asset with ETFs, options, and futures markets.

The US stock market continued its record-breaking rally. The S&P 500 index surpassed 7,700 for the first time, and the total market capitalization of the US stock market exceeded $70 trillion. The Nasdaq, Dow, and Russell 2000 indices also hit new highs on the same day. Trader Mayne, founder of Breakout Prop, explained that the forced liquidation of positions in the Situational Awareness fund, managed by Leopold Aschenbrenner, also contributed to the stock market's rise.

Bitcoin remained confined within a $10,000 range for about two months, while US stocks reached new highs. Mayne assessed that the cryptocurrency bull market has not yet begun and stated that a bullish reversal would only occur after a technical breakout is confirmed. The first target price after a breakout was set at $70,000. The probability of an interest rate freeze in December decreased from over 60% to approximately 43%, and the potential for US intervention to defend the yen was identified as a variable that could trigger the unwinding of yen carry trades and a rise in US interest rates.

[Article Summary]

-The ratio of the S&P 500 index to Bitcoin surpassed its 200-week moving average for the first time since 2012.

-The US stock market hit record highs, but Bitcoin remained in a $10,000 range for about two months.

-Analysis that Bitcoin's era of excess returns has weakened was contrasted with the assessment that it has matured into a major asset.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*