Is crypto outperforming the market?

by Arthur · October 31, 2022

It’s been a brutal year for cryptocurrencies, with the industry losing trillions since reaching all-time highs last year. But the crypto market is not alone. Shares, bonds and many commodities also rose sharply just a year ago. So what we want to know is, is cryptocurrency worse or better than the market?

Table of Contents

Benchmarks

It’s hard to deny the picture we get when we compare benchmarks and blue chip cryptocurrencies.

Bitcoin is down ~70% year-over-year (YoY), and Ethereum ~67%. Meanwhile, the S&P 500 is down ~15% and the Dow Jones is only down ~9%. Not an inviting sight.

Bitcoin vs S&P 500 does not make for good reading for fans of the world’s leading crypto.

And the further down the cryptocurrency totem pole you go, the poorer the performance. XRP is down 85%+, Dogecoin 80%+, and Solana ~85%+. And these are three of the top 10 cryptocurrencies.

Other benchmarks in the traditional financial world include the NASDAQ, down ~30%, the Russell 2000, down 22%, and the FTSE 100, down ~3%.

Comparisons

Sectors with comparable declines in share prices – such as technology – are also worth noting. For example, Meta is the largest social media platform in the world down 70% on an annual basis.

Others include Google’s parent company, Alphabet, down ~33%, and Amazon falling almost ~38%.

But others, like Apple, have done more than okay. The Cupertino-based firm is the only stock mentioned in this article up from a year ago.

Raw materials

Commodities, such as gold, silver, uranium or copper, have also seen a weakening in prices, albeit nowhere near the fall that cryptocurrencies endured.

Gold, like many other commodities, may be down, but compared to crypto, things look relatively rosy.

Read more: Bitcoin miners could threaten Paraguay’s power stability

Publicly traded cryptocurrency companies versus the market

The most well-known crypto companies have certainly underperformed the market, with MicroStrategy – which is now more or less a bitcoin ETF – off by ~64%, Coin base down almost 80%and GBTC—the trust that hasn’t become a proper ETF—collapses over 75%.

Even banks specializing in crypto, such as Silvergate and Signature, have seen their share prices fall more than traditional banking companies, down ~70% and ~50% respectively. This compares to their non-crypto-specific rivals such as JP Morgan Chase or Bank of America, which are only down 25% each.

If we get more specific, cryptocurrency mining companies have fared particularly poorly. Here is a list and their achievements since their respective peaks last year:

Deep cuts

Overall, the crypto industry is drastically underperforming other markets. The question that has yet to be answered is: Is this a sign of more pain to come for the industry or will cryptocurrencies be blessed with a boom when economies fall into intense recessions?

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