Bitcoin has outpaced traditional investment assets and sectors, such as technology and gold, in year-to-date (YTD) absolute returns and risk-adjusted performance, according to recent data from Goldman Sachs.
The leading cryptocurrency has gained 51% in YTD absolute returns, surpassing information technology (+16%), communication services (+15%), consumer discretionary (+11%), Russell 1000 Growth (+10%), gold (+4%), and the S&P 500 (+4%).
Meanwhile, energy and crude oil have seen declines of 11% and 14%, respectively.
Oil prices have dropped to their lowest level since December 2021 due to softer fundamentals and broader market concerns. The market's floor will depend on OPEC+ and the US.
In terms of risk-adjusted returns, which are measured by the Sharpe Ratio, the bellwether coin has also demonstrated strong performance with a score of 1.9. This is higher than information technology (1.5), Nasdaq (1.4), and healthcare (-1.1).
Bitcoin's recent surge in price has been attributed to the growing likelihood of the US Federal Reserve eventually ditching its hawkish monetary policy.
The cryptocurrency has increased by 35% since March 10, which was when regulators shut down Silicon Valley Bank.
Despite the warnings from market analysts of a possible correction, Bitcoin's rebound has been stronger than that of stocks from Wall Street, gaining the attention of investors.
The implosion of Terra, FTX, and Celsis 3AC as well as global monetary tightening damaged investor confidence in cryptocurrencies in 2022, with Bitcoin experiencing a massive correction.
However, Bitcoin ended the week with a 34 gain, the best since January 2021, amid the ongoing banking crisis, indicating a narrative shift in the perception of the largest cryptocurrency.
The crypto rally during the ongoing banking crisis has been welcomed by desperate cryptocurrency investors after a brutal bear market, and some of them have suggested that there is a change in the way Bitcoin is perceived. Nevertheless, the value of Bitcoin is still largely affected by changes in inflation rates and decisions made by the Federal Reserve regarding interest rates.