Greater volatility, equity offering and a lack of resistance to sanctions from regulatory authorities are only some of the reasons investors need to be watching BTC.
Let’s take a trip back until 2021’s end in the year 2021, Bitcoin pr news distribution service , when Bitcoin ( BTC) was trading around $47,000, which at that time was just 32 percentage points lower than the all-time record. In that period the tech-focused Nasdaq market index was at 15,650 points, only 3percent lower than its most-high level.
If we compare the Nasdaq’s gain of 75% between 2021-2022 Bitcoin’s positive move of 544 and one can conclude that a possible correction, caused by macroeconomic tensions , or an emergency, could result in Bitcoin’s price being substantially impacted by the stock market than other stocks.
In the end the “macroeconomic tensions and crises” were a reality, with Bitcoin price plummeted further 57% to $20,250. It shouldn’t come as a shock since the Nasdaq is at 24.4 percent since September. 2. Investors must also take into account that the historical 120-day volatility is 40 percent annualized against Bitcoin’s 72% which is eight times more, Bitcoin press news distribution service .
That’s to rethink making a decision to invest in Bitcoin. The risk-to-reward ratio after the adjustment downward in risk assets may provide more upside potential for the cryptocurrency taking into consideration three aspects: greater volatility in the recovery period in equity offering, as well as the ability to withstand regulatory sanctions.
The issue is that the market is currently in an extended bear market and there aren’t any indications of an immediate recovery since the double-digit rate of inflation across a variety of countries is causing pressure on central banks to keep an aggressive policy. See below how Bitcoin as well as the Nasdaq have had a difficult time throughout 2022.
The result of increasing interest rates and eliminating programs to stabilize debt assets is an environment that resembles a recession, Bitcoin press release distribution service . The question of whether an economic recovery will be realized is not important since no rational investor would prefer growth or credit-exposed sectors in a time when capital costs is rising and the consumption of capital is declining.
Bitcoin could hammer tech stocks, even during moderate recovery
The term “volatility” is often interpreted to mean negative because the price movements — whether upwards or downwards are more rapid. But, if an investor is expecting some sort of improvement in between 12 and 36 months in the future, there’s no reason to think that Bitcoin is going to be under pressure for this time.
Let’s take a neutral scenario like Bitcoin recovering 25 percent of the loss of $48,700 from the all-time record, and the tech-focused Nasdaq Index does not just recover all 24.4 percent losses from the beginning of the year to 2022, but it also gains another 40% growth over the 1-to-3 year period.
The scenario above would take Bitcoin up to $32,425, which is 53% lower than its record-breaking high in November 2021. Therefore, for those who purchased BTC on September. 2 at $20,250 that would translate to 60 percent profit.
However in this market that is neutral that is in place, the Nasdaq will erase its losses and increase 40%, totalling 19,563 points for an 64.4 percent gain. For clarity, that is 21.6 percentage more than the current record high.
The bull market can set price limits for stocks
The top seven companies on Nasdaq include Apple, Microsoft, Amazon, Tesla, Google, Meta and Nvidia All of them are famous tech giants. In the stock market earnings are the most crucial indicator that boosts investors’ confidence and a higher percentage of profits could be distributed to shareholders, or used to purchase back stock, or reinvested into the business or even used to buy back stock.
When profits rise, companies are rewarded for making more stock available, which is called follow-on offers, Bitcoin press release distribution . Furthermore, a tech firm is constantly acquiring new niche competitors to ensure its position as the leader. So, bull markets cause problems of their own when valuations are too high and buybacks are not a good idea.
For Bitcoin the fact that there are the most miners, investors, or infrastructure do not result in a better product because the production timetable is set since Day 1. The supply is set regardless of whether the price fluctuates.
Bitcoin was created to withstand centralization and regulation.
Nvidia, a leading graphic card and computer chip manufacturer, hit a 68-week lowest on September. 2 following U.S. officials imposed a new licensing requirement for Nvidia’s artificial intelligence chip sales towards China as well as Russia. In mid-2021, China was able to shut down mining operations located in China, Bitcoin press release distribution , leading the Bitcoin hash rate to fall 50% in just two months.
The major difference between the two cases is Bitcoin’s automatic difficulty adjustment, which eases the burden on miners in times of less activity. Although it’s true that the U.S. regulation will likely affect Nvidia’s exports, there’s nothing hindering Taiwanese TSMC chip maker, South Korean Samsung or Chinese Huawei from expanding and exporting their products.
Bitcoin is a digital peer-to peer digital cash network, which means it doesn’t require central exchanges to function. If governments decide to stop the trading of crypto completely, it will only increase the significance and power of this network that is decentralized. Many countries have attempted to stop foreign currency from circulation in order to create an underground market facilitators serving as intermediaries who are illegal, Pr services for Bitcoin companies and startups .
Based on the three scenarios, ranging from total blockage to generalized market for bulls, the odds favour Bitcoin over tech-related stocks at current prices. Therefore, when adjusted for its fluctuation, the risk reward significantly favors Bitcoin.
The opinions and thoughts that are expressed in this article are the sole opinions of the writer and do not necessarily reflect the opinions of Cointelegraph. Every investment or trading decision is a the risk of loss. You must be sure to conduct your own research before making the decision.
