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Here's how much bitcoin beat the Dow and S&P 500 in the first quarter

Here's how much bitcoin beat the Dow and S&P 500 in the first quarter

Bitcoin has fallen less than major U.S. equity indices in the first quarter but still hasn't proven it can act as a "safe haven" in times of market turmoil.


Bitcoin fell over 10% in the first quarter of 2020 posting smaller declines than major U.S. stock indexes. The Dow secured its worst first-quarter performance ever, losing more than 23% of its value in the first three months of the year. Meanwhile, gold was up about 4% as investors fled to safer assets.


The cryptocurrency fell over 10% in the first three months of the year.

However, the Dow secured its worst first-quarter performance ever, losing more than 23% of its value in the first quarter of 2020. The S&P 500 fell 20% in the first three months of the year, its worst first quarter ever and its biggest quarterly loss since 2008. The Nasdaq fell more than 14% in the first quarter.

Meanwhile, gold rose about 4% in the first quarter.

Financial markets have had a volatile three months as the coronavirus outbreak turned into a pandemic. Hundreds of thousands of people have been infected around the world, leading to businesses shutting down, major travel restrictions and people staying at home.

The economic impact is expected to be severe and that has led to a huge sell-off in stocks despite monetary policy action from central banks and fiscal stimulus from governments around the world.

Cryptocurrencies saw huge volatility in the first quarter. On March 8, the whole market sold off following a plunge in oil prices. Then on March 12, cryptocurrencies saw $93.5 billion wiped off their value in 24 hours and a 48% crash in the price of bitcoin.

Over the past few years, bitcoin has been likened to “digital gold” and has been seen by some as a safe haven asset to invest in when markets are under pressure. But it hasn’t necessarily played out that way even though it has fallen less than major stock indexes.

Those inside the cryptocurrency industry, however, feel that this could be starting to shift.

“Bitcoin is still a relatively smaller asset class that is increasingly uncorrelated to traditional asset classes and this is in the process of being established as we speak. This is why I believe the current market environment is a big test for Bitcoin and given how young the asset class is, it has actually held up quite well,” Vijay Ayyar, head of business development at cryptocurrency exchange Luno, told CNBC.

He said that while gold is “much more established as as safe haven asset,” bitcoin is “arguably a second choice at this point” given its total user base is smaller but growing.

“Hence, we’re seeing bitcoin lag gold a bit in terms of performance, but one can argue that as we move along in the next few months and years, bitcoin starts to take larger share away from gold and we will see an eventual ‘flippening’ happen, where bitcoin is at, or larger than, the market cap of gold and market movements in bitcoin start to reflect the overall market more accurately,” Ayyar said.

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