Is "Digital Gold" a Reality? Despite a Decline in the First Quarter, Bitcoin Still Outperforms Gold and the S&P 500
Although Bitcoin fell by 12% in the first quarter, it has maintained a 22% increase since the U.S. election day on November 5 last year, far surpassing gold's 14% rise and leaving the S&P 500 index, which dropped 3% during the same period, far behind. This strong performance makes Bitcoin's title of "Digital Gold" increasingly justified.
Market analysis points out that Bitcoin's relative strength is mainly attributed to its unique market positioning. A report from Bitfinex indicates that despite the favorable regulatory environment not materializing as expected following Trump's election, leading to some "buy the rumor, sell the news" capital withdrawal, Bitcoin still attracts safe-haven funds due to its anti-inflation characteristics.
It is noteworthy that Bitcoin's market capitalization share has rebounded to over 62%, reflecting that during times of market turmoil, investors are more inclined to shift their funds into this relatively mature digital asset.
In contrast, the performance of altcoins has been dismal. Ethereum plummeted 45% in the first quarter, marking its second-worst quarterly performance in history; Solana, which once hit an all-time high, has seen its price halved from that peak; mainstream projects like BNB and Cardano (ADA) also experienced declines of over 20% in the first quarter. The only exception is XRP, which barely maintained a certain increase. This polarized trend clearly reflects a significant decline in market risk appetite.
The biggest challenge currently facing the market comes from tightening liquidity. Both the spot and derivatives markets have seen a noticeable reduction in trading depth, with volatility continuing to decline. Meanwhile, the inflow of funds into Bitcoin ETFs is slowing down, as investors seem to be waiting for clearer signals from the Federal Reserve regarding policy.
In summary, analysts believe that in the absence of major catalysts, Bitcoin is likely to remain in a fluctuation range of $78,000 to $88,000, while altcoins may need more time to reverse their downward trend.
What are your views on Bitcoin's future trends? In the current market environment, do you prefer to invest in Bitcoin or other cryptocurrencies? Feel free to share your thoughts and investment strategies in the comments!