Bitcoin broke through the $42,000 barrier today with an almost 4% rise, sparking fresh enthusiasm among crypto enthusiasts. However, this surge in the value of the leading cryptocurrency seems to be in isolation, as altcoins have yet to join the rally.
Data from Santiment, a leading cryptocurrency analytics platform, reveals that Bitcoin’s climb over $42K is a noteworthy milestone, especially considering the lackluster performance of altcoins in recent trading sessions. While Bitcoin is basking in its upward momentum, altcoins are seemingly hesitant to follow suit, leaving investors wondering if a broader market rally is on the horizon.
Interestingly, this surge in Bitcoin’s value comes on the heels of the S&P 500 setting a new all-time high just yesterday. Market analysts are now speculating on the possibility of a broader market trend. They suggest that large-cap cryptocurrencies, including Bitcoin, may soon “regress to the mean” and align with the bullish trajectory witnessed in traditional equities markets.
Advocates of the cryptocurrency market argue that if historical patterns hold, Bitcoin and other major cryptocurrencies may play catch-up with traditional markets, potentially narrowing the gap that has persisted in recent weeks.
The cryptocurrency sector has experienced a notable divergence from stock markets since January 17th, when the two began moving in opposite directions. While traditional markets have seen a surge, the crypto space has struggled to keep pace, prompting questions about the correlation between the two asset classes.
Burton Malkiel Dismisses Stock-Picking Hype, Advocates Bitcoin Caution
On a different note, financial pundits are making annual S&P 500 forecasts, advocating for a stock picker’s market. However, one Wall Street luminary, Burton Malkiel, dismisses this approach, stating, “That’s useless, and it’s the wrong way to think about investing.”
In a recent interview, Malkiel asserted the importance of being an index investor. He championed investment strategies such as dollar-cost averaging, low-cost index funds, portfolio diversification, rebalancing, risk management, and tax-loss harvesting. Malkiel’s investment philosophy aligns with that of Warren Buffett and Jack Bogle, who have advocated for long-term investment in S&P 500 tracker funds.
Malkiel expressed concerns about the speculative nature of day trading, meme stocks, and cryptocurrencies, singling out Bitcoin’s volatility and perceived lack of utility. He emphasized the impracticality of using Bitcoin as a currency for daily transactions, citing its unpredictable value.
Related Reading | Binance Coin (BNB) Sees 3% Recovery, Eyes $450 Amid Market Volatility