Data says Bitcoin is more resilient to macro turmoil than Altcoins
Bitcoin has not had the best of things and altcoins have also been subject to the same fate. The market continued to succumb to the mounting pressures of various social issues, from the protests in Canada to the brewing conflict between Ukraine and Russia. However, in all of this, bitcoin has built up a better resistance and it shows in the data.
Bitcoin is ahead of indexes
Bitcoin has once again proven to be the best bet when the market is in turmoil. With the recent downtrend, all indices have suffered, as has bitcoin, but the latter has held up better in the face of adversity. While some indices have posted double-digit losses, BTC remains the top performer with only a 4% loss, a small value given that the net best-performing index saw losses that were twice as large.
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Known for holding back macro turmoil and commonly seen as a safe haven for investors, the Large Cap Index delivered 8% in losses, double that of bitcoin. As for the Mid Cap Index, there was more bad news to be had with losses reaching into the double digits. In total, this index, which includes some fast-rising projects in the crypto space, saw losses of 14%.
BTC is ahead of indexes in monthly performance | Source: mysterious investigation
The Small Cap Index is, of course, the worst performing candidate in times like these. These altcoins that are still carving out a niche for themselves are always the hardest hit, losing more than double the value lost by leading digital assets. This time, the index was at the same level as the Mid Cap Index, losing another 14% from February 2022.
Stablecoins Hold the Market
As mentioned above, the Small Cap Index was one of the hardest hit in the market. The altcoins that make up these indices tend to be the smallest coins and thus the riskiest to play as, during times of light to safe periods, investors tend to move their holdings to the larger coins to reduce their risk in the market.
This flight to safety has led investors to switch to assets such as bitcoin and those in the Large Cap Index. However, the obvious winner of this market is the stablecoins that have continued to gain market share†
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Pegged to the US dollar and not as volatile as the rest of the market, these stablecoins have provided a safe haven for investors looking to exit the market but not yet convert their holdings to fiat. With this move, stablecoins now dominate a larger market share as three assets are now in the top 10 cryptocurrencies by market capitalization, namely USDT, USDC and BUSD. Together, these three digital assets now account for 9% of the total crypto market capitalization.
BTC trending at $39,000 | Source: BTCUSD on TradingView.com
Featured image from US News Money, charts from Arcane Research and TradingView.com