Cryptocurrency markets have displayed resilience in the face of recent upheaval in the U.S. banking system, with bitcoin (BTC) in particular outperforming, crypto exchange Coinbase (COIN) said in a research report Friday.
Coinbase noted that bitcoin has outperformed other assets since the middle of February, with the cryptocurrency’s dominance as a percentage of total crypto market cap increasing to 47.7% from 43.9% during March. The outperformance accelerated early in the month, which coincided with the onset of the U.S. banking system turmoil, Coinbase said.
“Part of the reason is that the stress in the banking system reinforced bitcoin’s store-of-value properties,” the report stated, and because BTC mainly exists outside of the traditional financial system “it offers a hedge against current conditions.”
It has also benefited from investor concerns about the regulatory status of other cryptocurrencies, analysts David Duong and Brian Cubellis wrote.
Bitcoin’s correlation to the S&P 500 stock index dropped to 25% at the end of March from a peak of 70% in May last year, the analysts wrote. They didn't give the timespan for the correlation calculation.
The cryptocurrency’s relative outperformance versus other digital coins and tokens also reflects investor concerns about the regulatory status of other digital assets, and thinner liquidity specific to some BTC versus stablecoin trading pairs, the report added.
UPDATE (April 3, 15:24 UTC): Adds absence of timespan for correlation calculation in penultimate paragraph.
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