Oh it's still VERY early days comparatively speaking. I agree that it tracked more to equities than gold recently, but we can't forget that gold is far more established over a far longer period of time.
Also keep in mind that the market cap for Bitcoin is about 150 billion USD right now. For a global currency/global asset, that is quite a small market cap and naturally means it will be subject to increased volatility. By way of example, the total value of US 100 dollar bills and the total value of Euro 100 dollar notes is about 2.5 trillion. You have to consider the size of the potential economy that Bitcoin might serve in the future - which is undoubtedly global in scope. For these reasons I expect volatility to reduce over time, but stabilise at a much higher price.
Even if you don't think it's pertinent to your area of focus today, it IS emerging as a new asset class, and its current penetration of various financial channels is so small in footprint that prices are inevitably going to go MUCH higher. If Wall Street dedicates resources to this space (and we are starting to see hedge funds and banks do this now e.g. Grayscale, Deutsche Bank) it's going to flourish and become a very important aspect of modern portfolio theory.
People think gold is the only store of value out there. But people also use fancy artwork, real estate, cars and collectibles to store value - that's a ~280 trillion USD market for the primary purpose of parking money. If Bitcoin ends up being just 1% of the global store of value market, that's potentially $150,000 per coin.
From a mile away I can see the value transfer towards Bitcoin happening as digital millennials grow up and inherit wealth. Will they buy more gold like the boomers, or will they prefer something that is more digital and speaks to their generation personally? Time will tell.
Bloomberg put out a report this month which is well worth reading if you can find it.
(Bloomberg Intelligence)-- The stock market's shakeout will temporarily drag on Bitcoin, in our view, but with an outcome more reminiscent of gold's after the 2008 financial crisis. Coming into existence in 2009, the first-born crypto is faring relatively well, down less than a quarter as much as the S&P 500 in 2020 despite being almost 5x as risky on a volatility-weighted basis.
Bitcoin's 24/7 price transparency, and the lack of limits, interruptions or third-party oversight, is an accomplishment for an asset just a decade old. This year marks a key test for Bitcoin's transition toward a quasi-currency like gold, and we expect it to pass. Unlike the stock-market reset but similar to gold's, Bitcoin had its shakeout, stabilizing the foundation amid unprecedented global monetary stimulus and increasing adoption.
