Bitcoin’s strong and stable performances in 2019 have been undeniable. As the cryptocurrency’s returns continue to outperform gains seen in traditional market stalwarts (i.e. gold, silver, and the S&P 500), many traders are making comparisons to its relative strength within the market.

A recent tweet from crypto analyst @BitcoinEcon has raised some key questions for traders with respect to Bitcoin’s relative position in the market. 

Traditional Asset Comparisons

Essentially, the trader’s chart analyzes the profit probabilities of various returns generated by gold, silver, and the S&P 500. These returns are then placed within comparative timeframes that allow traders to see the average investment durations that might be required in order to see similar trading results across each asset class:

Which asset would you want to own after taking a look at this chart?

Bitcoin, the S&P 500 or Silver & Gold?

— (@BitcoinEcon) September 14, 2019

Bitcoin Outperforms Majors

Recent market moves support the outlook at the bullish trend for cryptocurrency is set to continue.  Long term charts in the BTC/USD pair indicate continued upside, as prices have made a clear break above the Ichimoku Cloud on the weekly price history.  Despite rallies of more than 177% on a year-to-date basis, BTC/USD valuations currently remain 47% below their all-time highs:

BTC/USD - TradingView

BTC/USD – TradingView

As a traditional safe haven, gold prices have made impressive rallies of 17% this year.  However, this performance trails returns generated in BTC/USD long positions by a wide margin and indicator readings in the Commodity Channel Index suggest gold is now trading in overbought territory:

Gold - TradingView

Gold – TradingView

Similarly, silver prices have reached overbought territory on the weekly charts and markets have already posted a sharp reversal from the highs of $19.65 posted during the early parts of September:

Silver - TradingView

Silver – TradingView

At the same time, evidence is mounting which suggests the historic bull run in equities has become overextended.  The S&P 500 is often thought of as the central benchmark for stock trends in developed markets because it contains the largest cross-section of assets amongst all industry classes.  For this reason, its year-to-date gains of 19.97% have been encouraging for many traditional investors.

S&P 500 - TradingView

S&P 500 – TradingView

However, the average annual return in the S&P 500 currently stands at roughly 10% (dating back to 1926).  As a result, current performances in the S&P have nearly doubled the market’s historical averages.  This suggests the index could be trading near its peak for the year, as the index trades near prior resistance levels at $3,028.

The ‘BTC Virus’

If these reversal prospects in the traditional asset classes continue, cryptocurrency investors may continue to outperform heading into 2020.  In response to the tweet from @BitcoinEcon, a reply from crypto enthusiast Arthur Heihm (@heim_arthur) simply read:

Only the BTC virus will spread…

Recent performance results seem to confirm this ‘viral’ outlook, as traditional asset classes like stocks and precious metals seem to be lagging far behind the returns generated by BTC/USD.

Will Bitcoin continue to outperform returns generated by gold, silver, and the S&P 500? Let us know your thoughts in the comments below!

Images via Shutterstock, BTC/USD charts by Tradingview

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