The Stealth Rally of Bitcoin keeps it atop the Quarterly Scoreboard

After surviving a long, cold, and generally unstable period from December to February, Bitcoin has emerged as a top performer in the first quarter when it comes to being the best-performing asset class of the quarter by a wide margin after exiting its "crypto winter." 

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According to Trade Algo data, Bitcoin is ending the third quarter of the year with a profit of approximately 70%, its best quarter since the three months ended March 2021, when the cryptocurrency surged about 103%. As you can see from the above chart, the iShares 20+ Year Treasury Bond ETF's 5.3% gain year-to-date is hugely outpacing the S&P 500's 5.5%, the Nasdaq 100's 19% increase, as well as the iShares Index's 5.5% rise. 

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Investing in this relatively young asset class has attracted a number of investors who have the expectation that volatility would be part of the asset class' attraction as it is relatively new. The rise of Bitcoin into mainstream consciousness in 2017 was accompanied by a more than 1,000% annual increase only to be followed by a 74% drop in 2018, with the crypto winter that ensued. An industry scandal and a series of bankruptcies accompanied the decline of the stock price last year, after it had increased for three consecutive years. 

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Noelle Acheson, author of the newsletter “Crypto Is Macro Now”, was one of the first to comment on what has happened in the crypto market this year, and she described how this is not a surprise to many market observers. As a result, there were many signs that a strong price floor was forming in November, and I knew that either the liquidity narrative changed in early January or longer-term investors were beginning to see a store-of-value opportunity (which also appears to have occurred), and it was only a matter of time before either happened.