Although the Dow Jones Industrial Average recouped some of its losses in Friday’s closing, the index had a rocky week due to the escalating trump war between the U.S. and China. Bitcoin, on the other hand, has been on a massive bullish run the entire week.
Analyst opinions on the stock market seem to be changing like night and day. While last week, so many in the media were celebrating that the likelihood of a recession was slim, these fears are now returning.
With the trade war intensifying between the U.S. and China, President Trump has put forward a $200B tariff on goods coming from China. Trade negotiators tried to downplay the hysteria and said that a deal is still in the works. The markets rebounded slightly on this news late Friday, posting strong numbers at the closing, but uncertainties remain.
Due to President Trump reaffirming the trade talks are still ‘ongoing,’ the Dow staged a 450-point comeback. It even managed to end the day higher than it opened. Yet, the index still posted losses around 2.1% for the week — the worst the index has performed so far this year.
Bitcoin (BTC), on the other hand, posted exceptionally strong gains despite this geopolitical mayhem. The flagship cryptocurrency enjoyed 30 percent returns for the entire week and even briefly touched the $7,500 price point. In the past three months, Bitcoin has enjoyed returns of about 120 percent and there seems to be little indication of it slowing down.
It is interesting to note the divergence between the stock markets and Bitcoin. While equities markets remain uncertain, posting weekly losses, Bitcoin has been enjoying its strongest weeks of 2019. This underscores how decoupled Bitcoin is from regular equities markets — another strong indicator that Bitcoin remains a suitable hedge against a possible stock market meltdown.
Do you believe the cryptocurrency market is a better bet than the stock market currently? Let us know your thoughts in the comments below.