Even as concerns of a potential economic recession loom over the markets, the cryptocurrency space appears relatively less volatile. Interestingly, the White House had in a blog last week discussed what exactly is the official definition of recession. It is unlikely that the recent decline could mean we are in a recession, it said. This brings to the question as to how would Bitcoin perform if the economy were to enter a recession in the future.
Why Bitcoin’s Second Worst Growth Is Still Better?
Amid all the macroeconomic hurdles and overall uncertainty due to serial crypto related setbacks, Bitcoin too suffered in recent times. However, Bitcoin’s (BTC) decline in recent times is still not worse than some of the high performance traditional assets. According to data from Crypto Compare, the Q2 of 2022 registered Bitcoin’s second worst quarterly performance in its history.
“Q2 saw Bitcoin (BTC) experience its second worst quarterly performance in its history. Strikingly, various growth stocks still underperformed BTC over this period, even with much lower volatility.”
High turbulence was witnessed with frequent headwinds during the second quarter, making it difficult for recovery. Coin Bureau, a crypto influencer, said the quarter “will go down in infamy in crypto history.” So much happened that it is hard to summarize and condense it in a single report, he added.
Is Bitcoin Recession Proof?
Despite such a bad performance during the period, Bitcoin (BTC) trumped some of the big company stocks in the market. When compared with company stocks of Peloton, Netflix, Roblox, and Snapchat, Bitcoin (BTC) performed better in the first half of 2022. To an extent, this explains why some of the crypto supporters call Bitcoin recession proof. However, macroeconomic events clearly continue to affect crypto prices from time to time. It remains to be seen if Bitcoin isolates itself from the macro links.
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During the period, Bitcoin witnessed a huge downturn in its price. BTC went from a high of over $47,000 at the start of 2022 to under $20,000 in June. As of writing, Bitcoin is trading at $20,886, down 4.52% in the last 24 hours, according to CoinMarketCap. Until only three months ago, the top cryptocurrency was trading around the $40,000 range. Recently, the crypto asset suffered losses after Elon Musk’s Tesla announced it sold 75% of its BTC holdings. The holdings were sold to maintain overall liquidity for the company, it explained. However, Musk clarified that his company is open to increasing its Bitcoin holdings in the future.
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