Bitcoin gains 28% so far in 2020 amid risk-off sentiment

Bitcoin has emerged as the top rising asset class so far in 2020 returning a whopping 28.45 percent in less than a month, data shows.

According to data collected from Coindesk, the world's largest cryptocurrency closed at $9,277 on January 29 versus $7,222 on December 31, 2019.

It was trading near its three-month high of $9,369 at the time of publishing this copy.

Bitcoin managed to outperform other asset classes including gold which rose 3.06 percent, rupee (0.06 percent). Meanwhile, Nifty and crude generated negative returns falling 0.32 percent and 11.09 percent, respectively, so far this year.

Bitcoin's price surge came on the back of several geopolitical and global events such as US-Iran tussle and the outbreak of coronavirus in China.

The cryptocurrency is showing behavioural patterns similar to gold, Bloomberg reported.

“Since the beginning of the new year, the two assets 60-day correlation has flipped from negative to positive. The correlation coefficient now stands at 0.21, up from a low of negative 0.15 in December, and above the trailing one-year daily average,” said a Bloomberg report.

A similar observation was made by analyst Mati Greenspan.

For those wondering about $BTC's daily correlation to other markets.

Red = Gold
Blue = Stocks

In the last 9 months bitcoin has been making a move towards acting more like gold than stocks. However the correlations are still very weak (<0.2).

A strong correlation would be >0.7. pic.twitter.com/XVw39VvzNz

— Mati Greenspan [tweets are not trading advice] (@MatiGreenspan) January 28, 2020

Ace investor Thomas Lee, in a tweet, claimed that Bitcoin has surpassed gold in the so-called battle of the safe havens.

Bitcoin is best performing asset class YTD +26%... demand for "safe haven" is boosting Bitcoin and arguably, #Bitcoin is seen as a better "safe haven" than $Gold #gold

- Gold is up a decent 3% vs a whopping 26% for Bitcoin pic.twitter.com/GWKEfYGcut

— Thomas Lee (@fundstrat) January 28, 2020

However, financial commentator and Bitcoin sceptic Peter Schiff rebutted the safe-haven appeal of Bitcoin touting trading in the cryptocurrency as merely a game of speculation.

For now Bitcoin may be the best performing asset this year, but it has nothing to do with safe haven buying. Those buying #Bitcoin are merely speculating. Some may be speculating that others will buy it as a safe haven, but none actually are. There is nothing safe about Bitcoin!

— Peter Schiff (@PeterSchiff) January 29, 2020

At current valuation, Bitcoin accounts for nearly 66.4 percent of the overall cryptocurrency market. It has a market cap of nearly $170 billion.