The digital asset market in 2023 continues to impress, with both Bitcoin (BTC) and Ethereum (ETH) outperforming traditional assets such as gold by 93% and 39%, respectively. Market corrections for these major cryptocurrencies have been shallower than in previous cycles, indicating strong investor support and positive capital inflows.
Glassnode’s latest analysis reveals the digital asset market’s robust performance and the data presents various key insights. BTC prices have surged by over 30% in recent weeks, partly due to positive developments related to Bitcoin ETF applications awaiting approval from the SEC. Comparatively, BTC and other digital assets have outperformed traditional asset classes like commodities, precious metals, equities, and bonds.
Both Bitcoin and Ethereum have exhibited remarkable relative strength in 2023, with BTC gaining 93% in gold terms and Ether rising by 39%. This impressive performance coincides with growing global uncertainty, attracting the attention of traditional investors.
The correlation between their returns on a rolling 30-day basis is evident, with similar downswings and BTC displaying stronger performance during upswings. Digital assets also exhibit higher volatility compared to gold.
When examining the deepest corrections during macro uptrends, Ethereum has outperformed by experiencing a milder correction of -26% from its 2023 high, compared to -60% or more in previous cycles. BTC’s deepest correction in 2023 has been just -20.1%, considerably better than previous cycles.
Rising Bitcoin Dominance
However, Bitcoin dominance, which measures its market cap relative to the entire digital asset market, has been steadily increasing, reaching 53% in 2023, up from a low of 38% in late 2022. It suggests a prolonged trend where Bitcoin’s dominance rises in the aftermath of bear markets.
The Altcoin Indicator highlights positive market momentum for digital assets, supported by capital inflows into BTC, Ethereum, and stablecoins. This indicator turned positive on October 20th, preceding a significant BTC price increase.
While altcoins have seen a notable 37% increase in market cap, BTC surged 110% in 2023. It indicates that while altcoins are outperforming traditional assets and fiat currencies, they still lag behind the performance of Bitcoin.