Cryptocurrencies continue to outperform as global economy wanes (Image: Getty Images).
Cryptocurrencies continue to outperform as global economy wanes
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Cryptocurrencies have held up as one of the best performing asset classes in 2020, amid a tumultuous year on global markets.
As a case in point, the year-to-date (YTD) return on Bitcoin (BTC) outshone gold by more than 24 per cent. That was before a surge in cryptocurrency prices this week. BTC’s price rocketed to $15,900 on Monday night – a gain of more than 12 per cent in less than 24 hours.
Cryptocurrency performance
At the start of this week, Bitcoin (BTC) had posted a YTD return of more than 53 per cent, adding $100.15 billion to its total value. Blockchain network Ethereum (ETH) is also a strong performer and is now up 144 per cent YTD.
Rounding out the Top 3 is Chainlink (LINK), an application built on the Ethereum network. It ranks in the top 10 digital best performing assets by market capitalisation and has gained over 300 per cent YTD.
| Asset | Ticker | YTD return |
| Bitcoin | BTC | 53.60% |
| Ethereum | ETH | 144.32% |
| Chainlink | LINK | 265.91% |
| GOLD | XAU/AUD | 29.32% |
| WTI crude oil | CL | -31.79% |
| S&P 500 | SPX | 0.27% |
| S&P ASX 200 | XJO | -9.57% |
| S&P ASX Small ordinaries | XSO | -6.52% |
A waning global economy
In the wake of the COVID-19 pandemic, the Organisation for Economic Co-operation and Development (OECD) is now forecasting a grim 7.6 per cent GDP decrease in their June 2020 outlook. This represents a loss of over $US6.6 trillion. According to OECD, global GDP won’t return to 2019-Q4 levels for at least two years.
The report shows that Australia’s GDP will decrease between 5 and 6.3 per cent, depending on the severity of our unfolding COVID-19 second-wave.
Australian stock markets are yet to fully recover from the economic hit. Small cap businesses are less affected than the S&P ASX 200 (XJO), with the S&P ASX Small Ordinaries index (XSO) down 6.52 per cent compared to the XJO’s 9.57 per cent loss.
Are digital currencies a safe haven?
Gold continues to be a safe haven for investors as the pandemic unfolds. The precious metal stacked on over $500 per ounce in 2020. The S&P 500 recovered its losses, now up 0.27 per cent YTD. Oil continues to perform poorly, due to a worldwide slump in demand for ‘black gold’.
Compared to those asset classes, the top digital assets have outperformed amid an unprecedented shock to the global economy.
BTC Markets is Australia’s leading digital asset exchange, trusted by 270,000 verified clients who have traded over $9.8 billion. Buy, sell and trade Bitcoin (BTC), Ethereum (ETH), XRP and more with AUD today. Visit BTC markets for more information.
This article was developed in collaboration with BTC Markets a Stockhead advertiser at the time of publishing.
This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
