Bitcoin is Unlikely To Outperform The Stock Market Again
Updated
Above, you can see that Bitcoin is currently back to 2017 ATH levels when weighted against the S&P 500. In addition, Bitcoin has also sustained a breakdown below both long term trendlines against the index. I can't really be more generous than that. Even if stocks have already hit bottom, I think Bitcoin is unlikely to outperform again, at least for many years. If this is the case, can Bitcoin survive based on pure utility? Or is its utility also its value? This could imply that it is self-defeating.
In the summer of 2021, I still speculated that Bitcoin could have a final blow-off top. Bitcoin bounced from the first trendline and made a brief new all-time high, but did not manage to have the blow off moment many were expecting. Here is the original post, which was my first article to be featured on the front page of TradingView.
I also made a post in August, 2021 about Bitcoin's performance against different assets, noting its weakness against Tesla and relative strength against Gold. Now, Bitcoin is lingering right on the long term trend against Gold, and I would not be surprised to see that break down as well.
Even then, I was thinking Bitcoin could achieve Gold's market cap this cycle. This is why it's extremely important to be adaptive when investing. As I began noting towards the end of 2021, some warning signs started to crop up. Had I ignored these signs of weakness, I would now be staring at altcoin bags that are 50-95% down from where I sold them back in January, leaving a lot of profit on the table. Now I'm cash heavy, but what to buy? Crypto no longer seems particularly attractive to me from a medium-term standpoint. I think the speculation phase is over, and if crypto can't prove itself "necessary" for society, it can just fade away. These breaking trends tell me as much. Even Ethereum failed to make a new high against Bitcoin this cycle, essentially proving the entire altcoin market as a grand charade. The implications of these failing trends are quite awful for Crypto, unfortunately.
This is what has happened to Bitcoin since it broke down from the long term uptrend against TSLA:
This is especially concerning, considering many would also argue that TSLA itself is overvalued. This implies logically to me that Bitcoin can fade to extremely low levels, particularly if traditional markets have not yet found bottom.
You can make as much hopium TA as you like, but I think this simple observation will weigh on long term sentiment for market players as they slowly take notice. Institutions and billionaires have piled into the new asset class because it experienced some years of outperformance. This chart shows that this current period of underperformance is likely to continue.
I think this is incredibly important, because it impacts where people decide to invest, once all the dust settles. Based on the trends I noted above, I think other investments will perform better. I believe there will be plenty of time to figure this out as we experience a massive re-allocation of capital. Now is not necessarily the time to rush into any investments. There are lots of losers during this downturn, but if one managed to profit from the big run up this seems to be a good time to sit back and re-evaluate priorities. That's what I'm doing.
This is entirely my own opinion and should be used for speculative and entertainment purposes. Not financial advice.
-Victor Cobra
In the summer of 2021, I still speculated that Bitcoin could have a final blow-off top. Bitcoin bounced from the first trendline and made a brief new all-time high, but did not manage to have the blow off moment many were expecting. Here is the original post, which was my first article to be featured on the front page of TradingView.
I also made a post in August, 2021 about Bitcoin's performance against different assets, noting its weakness against Tesla and relative strength against Gold. Now, Bitcoin is lingering right on the long term trend against Gold, and I would not be surprised to see that break down as well.
Even then, I was thinking Bitcoin could achieve Gold's market cap this cycle. This is why it's extremely important to be adaptive when investing. As I began noting towards the end of 2021, some warning signs started to crop up. Had I ignored these signs of weakness, I would now be staring at altcoin bags that are 50-95% down from where I sold them back in January, leaving a lot of profit on the table. Now I'm cash heavy, but what to buy? Crypto no longer seems particularly attractive to me from a medium-term standpoint. I think the speculation phase is over, and if crypto can't prove itself "necessary" for society, it can just fade away. These breaking trends tell me as much. Even Ethereum failed to make a new high against Bitcoin this cycle, essentially proving the entire altcoin market as a grand charade. The implications of these failing trends are quite awful for Crypto, unfortunately.
This is what has happened to Bitcoin since it broke down from the long term uptrend against TSLA:
This is especially concerning, considering many would also argue that TSLA itself is overvalued. This implies logically to me that Bitcoin can fade to extremely low levels, particularly if traditional markets have not yet found bottom.
You can make as much hopium TA as you like, but I think this simple observation will weigh on long term sentiment for market players as they slowly take notice. Institutions and billionaires have piled into the new asset class because it experienced some years of outperformance. This chart shows that this current period of underperformance is likely to continue.
I think this is incredibly important, because it impacts where people decide to invest, once all the dust settles. Based on the trends I noted above, I think other investments will perform better. I believe there will be plenty of time to figure this out as we experience a massive re-allocation of capital. Now is not necessarily the time to rush into any investments. There are lots of losers during this downturn, but if one managed to profit from the big run up this seems to be a good time to sit back and re-evaluate priorities. That's what I'm doing.
This is entirely my own opinion and should be used for speculative and entertainment purposes. Not financial advice.
-Victor Cobra
Note
I should also clarify that there will always be brief periods of outperformance, but that Bitcoin seems unlikely to outperform at such a ridiculous capacity over bigger timeframes again.Note
Over a year later, and Bitcoin hasn't really shown much outperformance. 
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