How do assets perform after turmoil?
Rony Szuster, head of research at Mercado Bitcoin, conducted an in-depth study of market performance following major events such as the COVID-19 pandemic. He found that Bitcoin significantly outperformed gold and the S&P 500 in the aftermath of these crises. For instance, after the U.S. announced tariffs in April 2023, Bitcoin surged 24% within two months, while gold and the S&P 500 only rose by 8% and 4%, respectively.
Similarly, in March 2020, during the early stages of the COVID-19 pandemic, Bitcoin increased by 21%, again surpassing the returns of gold and the S&P 500. These cases highlight Bitcoin's potential as a robust investment tool during uncertain times, even as assets are generally sold off during economic shocks.
What does the future hold for Bitcoin?
As tensions between the U.S. and Iran escalate, Bitcoin has performed well, yielding positive returns. Research indicates that since the conflict intensified, Bitcoin has risen over 2.2%. In contrast, gold has dropped 11%, and the S&P 500 has decreased by 4.4%, marking the largest monthly decline since 2022. This trend further reinforces Bitcoin's resilience under geopolitical pressure.
Szuster emphasized the risks of interpreting data immediately after a crisis, noting the need for a long-term perspective to fully understand asset performance during turbulent periods.
“Making judgments based solely on the opening of a story can lead to misunderstandings,” Szuster stated. Using a film plot metaphor, he pointed out that liquidity demands often drive investors to liquidate positions, affecting both risk assets and traditional safe-haven assets.
The analysis indicates that despite Bitcoin's volatility, its recovery patterns post-crisis demonstrate its potential resilience. This characteristic has been consistently observed in the recent U.S.-Iran tensions.
Based on historical data from the past decade, Szuster concluded that Bitcoin is the best-performing asset, providing the highest returns among its peers.