Key Takeaways

  • Bitcoin kicked off the new year with its best start since 2013, though its returns tend to disappoint between mid-February and late March; we’re mindful of the potential for elevated price volatility in the coming weeks. This doesn’t just apply to bitcoin though; ETH has also struggled during this period over the last few years. 
  • We’re starting to see a divergence in fund flows between bitcoin investment products and the world’s largest gold ETFs; the longer the yellow precious metal underperforms, the more attention BTC is likely to garner. Gold has gone from hero to zero in 2021; the precious metal’s ~9.8% decline year-to-date marks its worst start in over 30 years. 
  • Liquidity tightening coupled with growing fears of inflation were enough to send the world’s most sought after reserve asset (US Treasuries) into a bit of a tailspin last week. This is important to monitor because higher rates can throw ice water on the world’s best performing and most popular trades; look no further than the thrashing U.S. tech stocks received after higher real yields caused investors to panic.

Bitcoin kicked off 2021 with its best start since 2013, nearly doubling in the first seven weeks of the year through February 21st (+98%). In fact, BTC was on pace for its best month since November

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