{"id":56773,"date":"2022-04-18T08:00:59","date_gmt":"2022-04-18T12:00:59","guid":{"rendered":"https:\/\/www.ino.com\/blog\/?p=56773"},"modified":"2022-04-25T10:48:32","modified_gmt":"2022-04-25T14:48:32","slug":"bitcoin-tested-by-uncertainty-and-wins","status":"publish","type":"post","link":"https:\/\/wwwtest.ino.com\/blog\/2022\/04\/bitcoin-tested-by-uncertainty-and-wins\/","title":{"rendered":"Bitcoin Tested By Uncertainty... And Wins!"},"content":{"rendered":"<p>I probably don\u2019t have to tell you that no matter where you turn these days, there\u2019s one thing you can be certain of.<\/p>\n<p>Uncertainty.<\/p>\n<p>That\u2019s right. There\u2019s a ton of uncertainty no matter where we turn. And that\u2019s true, as a matter of fact, in our daily lives: While we try to make things as predictable and certain as possible, in the end, we\u2019re all just flat-out exposed to uncertainty.<\/p>\n<p>It\u2019s also true when it comes to our investments in gold (GC1), stocks (SPX), tech (NASDAQ), and Bitcoin (BTC). In fact, that uncertainty is even more at play. See for yourself.<\/p>\n<p><a href=\"https:\/\/assets.ino.com\/img\/sites\/ino\/email\/13251.jpg\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/assets.ino.com\/img\/sites\/ino\/email\/13251.jpg\" width=\"1533\" height=\"848\" alt=\"Bitcoin Daily Chart\" class=\"aligncenter size-medium\" \/><\/a> <\/p>\n<p>As you can see from this chart of gold, stocks, and tech, every asset has had its fair share of volatility over the past year. In fact, the performance of gold, stocks, and tech have ranged from 18% to the upside (gold) to -9% to the downside (tech) during the last one-year performance period. Lumping all those assets together, that\u2019s a net swing of 27% from top to bottom. Whew!<br \/>\nBut when you throw Bitcoin into the mix, it\u2019s clear that BTC makes that uncertainty look like a walk in the park. Why? Because over the same one-year performance period, Bitcoin has ranged from 13% to the upside (Nov 2021) to -50% to the downside (July 2021). That\u2019s a net swing of 63% from top to bottom or about 2.3 times the performance volatility of gold, stocks, and tech.<!--more--><\/p>\n<h2 style=\"color: #003380; font-size: 20px;\">Bitcoin Is Maturing As A Store Of Value<\/h2>\n<p>But here\u2019s the best part: While the volatility of BTC is cringe-worthy, it\u2019s also a sign that the leader of crypto is hanging in the game. And that\u2019s even more apparent when when dial up the same chart as above but use a more recent time frame. Here\u2019s what I mean:<\/p>\n<p><a href=\"https:\/\/assets.ino.com\/img\/sites\/ino\/email\/13252.jpg\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/assets.ino.com\/img\/sites\/ino\/email\/13252.jpg\" width=\"1088\" height=\"842\" alt=\"Bitcoin Daily\" class=\"aligncenter size-medium\" \/><\/a> <\/p>\n<p>With this chart, we\u2019re looking at the performance of gold, stocks, tech, and Bitcoin since the beginning of February. Since that starting point, stocks are down 2%, and tech is down 5%. That performance differential is minor, so for all intents and purposes, stocks and tech are moving in lockstep.<\/p>\n<p>But not so with gold and Bitcoin. In fact, while stocks and tech have moved lower in tandem, gold and Bitcoin have moved higher in tandem: Since the beginning of February, gold has been up 10%, and Bitcoin is up 4%. Viewed through the lens of stocks and tech, that tells me that BTC is beginning to create a divergence from the stock market, just like gold. And that\u2019s a clear sign of BTC growing as a store of value. And that, to me, is a bullish indicator of a maturing market.<\/p>\n<p>I picked the February 1 starting point because it marks the convergence of a ton of volatility catalysts, including the war in Ukraine, rising inflation, higher interest rates, and geopolitical unrest. So, if an asset is going to diverge from stocks and tech, this is the time it would do it. And this chart clearly shows that BTC is in that class.<\/p>\n<h2 style=\"color: #003380; font-size: 20px;\">Heed My Golden Rule<\/h2>\n<p>So what can we do?<\/p>\n<p>When it comes to stocks and tech, I have a golden rule that\u2019s served me well over a lifetime of investing: Buy good companies that know what they\u2019re doing in solid markets that have strong upside. And don\u2019t worry too much about the day-to-day fluctuations in price. Let management handle that. When you follow this method, you\u2019ll focus on your companies\u2019 fundamentals and let the bosses manage the uncertainty. Just make sure to check in occasionally.<\/p>\n<p>And as far as crypto is concerned, it\u2019s clear that BTC is maturing at a rate that even I\u2019m surprised by. In fact, it\u2019s clear Bitcoin is beginning to behave like a store of value like gold and not like the thousands of throw-away cryptocurrencies that won\u2019t see the light of 2023, much less beyond. <\/p>\n<p>The above charts also point out that there\u2019s really no place to hide. Whether you\u2019re invested in gold, stocks, tech, or Bitcoin, the name of the game over the last year has been uncertainty. And with major volatility catalysts likely at play over the near and longer-term, that volatility isn\u2019t going away anytime soon.<\/p>\n<p>So, while Bitcoin is still the leader of <a href=\"https:\/\/quotes.ino.com\/exchanges\/category.html?c=cryptocurrencies\">crypto<\/a> and deserves a place in just about everyone\u2019s portfolio, now is the time to be more cautious than usual. So, I wouldn\u2019t be adding any new crypto positions or adding to existing ones right now. And like always, I wouldn\u2019t devote any more than 1% to 2% of your portfolio to all your cryptocurrencies.<\/p>\n<p><a href=\"https:\/\/www.ino.com\/blog\/meet-ino-com-contributor-wayne-burritt\/\">Wayne Burritt<\/a><br \/>\nINO.com Contributor<\/p>\n<p><span style=\"font-size: 12px; font-style: italic;\">Disclosure: This contributor may own cryptocurrencies mentioned in this article. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.<\/span><\/p>\n<!-- AddThis Advanced Settings generic via filter on the_content --><!-- AddThis Share Buttons generic via filter on the_content -->","protected":false},"excerpt":{"rendered":"<p>I probably don\u2019t have to tell you that no matter where you turn these days, there\u2019s one thing you can be certain of. Uncertainty. That\u2019s right. There\u2019s a ton of uncertainty no matter where we turn. And that\u2019s true, as a matter of fact, in our daily lives: While we try to make things as [&hellip;]<!-- AddThis Advanced Settings generic via filter on get_the_excerpt --><!-- AddThis Share Buttons generic via filter on get_the_excerpt --><\/p>\n","protected":false},"author":34,"featured_media":56776,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6920],"tags":[14379,14677,31656,6385],"class_list":["post-56773","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ino-com-contributors","tag-bitcoin-bitstampusd","tag-cryptocurrency-trading","tag-how-to-trade-crypto","tag-wayne-burritt"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v23.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Bitcoin Tested By Uncertainty... 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