Bitcoin has been notorious for its volatility in the past five years, while stock and oil markets have maintained their stability. Now though, the tables have turned, claims tech entrepreneur Alex Mashinsky
Bitcoin, known for its high volatility in the last five years, is now more stable than stock and oil markets, according to Alex Mashinsky, CEO of crypto lending platform, Celsius Network.
Speaking in an interview on the David Pakman Show on April 22, Mashinsky said Bitcoin appears to “[Look] more stable than the stock market. [Bitcoin] only moves 2% a day and the stock market moves 5 to 10%.”
At the time of writing, Bitcoin is up 1.44% against the US dollar, CoinMarketCap data shows.
Mashinsky also claimed that Bitcoin has outperformed stocks in the last 11 years. He noted that Bitcoin’s returns are in the millions, while Netflix – the leading stock performer in the last decade – has underperformed by comparison.
He pointed out that the leading cryptocurrency is “2,000 times better than the world champion of the stock market.”
The world economy took a major hit in recent months, as the coronavirus grounded many economic activities and unsettled investor nerves.
Cryptocurrency enthusiasts have long claimed that Bitcoin is a safe-haven asset, akin to the digital version of gold. However, the leading asset was not insulated from the stock market crash in March.
Mashinsky says that there was less demand for Bitcoin when the stock market crashed because it has been largely correlated to stock market movements over the last year. This correlation, and the ongoing pandemic, may have done enough damage to rattle investors and discourage the bulls.
Bitcoin crashed to less than $4,000 per coin after its crash on March 13 but has since recovered and is currently trading above $7,000, showing strength in Bitcoin’s ability to recover without the government bailouts the wider economy enjoyed.
Despite outperforming stocks, Mashinsky warned that investors should not put all their eggs in one basket: “Bitcoin should be some part of a balanced portfolio.”
He believes that investors should allocate 5% of their portfolio holdings to cryptocurrencies, and a similar amount in precious metals, such as gold or silver.