Bitcoin is ready to beat stocks and bonds again after underperformance against Wall Street
Former Credit Suisse global head of portfolio and Risk Dimensions CIO Mark Connors says bitcoin has broken out of its longest stretch of underperformance in history and is ready to beat stocks, bonds, and gold as inflation stubbornly sticks around.
What to know:
- Bitcoin may be entering a new phase of outperformance versus traditional assets after ending its longest-ever stretch of underperformance against the S&P500 in early May, according to investor Mark Connors.
- Connors argues that persistent inflation, structurally high oil prices and a “higher-for-longer” interest-rate environment are pressuring bonds and could favor bitcoin over both equities and fixed income.
- He says investors are shifting from gold to bitcoin and contends that advances in technology, particularly AI and blockchain, are key to countering inflationary pressures.
Connors, who spent years as the global head of portfolio management at Credit Suisse, said bitcoin recently broke out of what had been its longest stretch of underperformance against the S&P 500 in history, a 142-day period that ended in early May.
“I think bitcoin’s underperformance versus markets is over,” Connors said in an interview. “It’s in the consolidation phase [that] has shifted into an outperformance phase.”
The shift comes as investors grapple with stubborn inflation, rising oil prices and uncertainty around interest rates. Connors argued that bonds, traditionally viewed as defensive assets, are increasingly under pressure as markets adjust to a “higher-for-longer” rate environment.
“Bitcoin, as it always does, takes it on the chin early, but then it always comes out first,” he said, adding that bitcoin could continue outperforming both equities and fixed income “as we grind through the straits of poor news and oil persistently being high.”
