Bitcoin has been underperforming U.S. stocks and other macro assets since the widespread deleveraging event in early August, according to a recent report from Coinbase. On August 4th, the cryptocurrency market experienced a significant selloff, shedding approximately $367 billion in value within a 24-hour period. This drop coincided with a broader decline in equities, marking one of the worst days for risk assets since the infamous “Black Monday” crash of 1987.
Since that early August event, Bitcoin has lagged behind major equity indices. Coinbase analysts David Duong and David Han noted in their Friday report that, on a risk-adjusted basis, Bitcoin’s price is currently 0.50 standard deviations below its three-month average. In contrast, the S&P 500 is performing better, with index levels 1.41 standard deviations above their three-month average.
The analysts highlighted that Bitcoin’s recent price performance has been lackluster, with the cryptocurrency trading within a narrow range. This reflects ongoing concerns about the absence of a compelling new narrative to drive Bitcoin’s price upward.
“Bitcoin prices have struggled to fully recover since early August. A lack of narratives, and the fact that September is a seasonally tough period for crypto, is keeping traders on the sidelines,” Duong and Han explained.
They attributed Bitcoin’s sluggish performance to several factors, including tapering flows into exchange-traded funds (ETFs), specific supply overhangs related to Bitcoin, and a recovery in the multilateral U.S. dollar index, which may be exerting downward pressure on crypto assets.
The report also pointed out that Ether (ETH) has continued to underperform Bitcoin, with the ETH/BTC ratio hitting new year-to-date lows amidst outflows from spot Ethereum ETFs.