A new report from on-chain analytics firm Glassnode highlights the strong performance of Bitcoin (BTC) and Ethereum (ETH) compared to traditional markets in 2023.
According to a Nov. 1 Glassnode report, Bitcoin has appreciated 93% against gold so far this year. When priced in gold, Bitcoin is trading at the highest levels since September 2021, right before the major crypto market correction. The data illustrates Bitcoin’s potential as a hedge against inflation and economic uncertainty.
Ethereum has also significantly outperformed gold in 2023, appreciating 39% against the precious metal. Glassnode notes that in 2023 ETH and BTC returns have been tightly correlated on a 30-day rolling basis, experiencing similar magnitude drawdowns but with Bitcoin seeing stronger performance during uptrends.
Notably, both Bitcoin and Ethereum have also experienced relatively shallow corrections compared to prior crypto cycles. Glassnode highlights that Bitcoin’s maximum drawdown in 2023 has only been 20.1%, compared to over 60% corrections in previous bull markets. For Ethereum, the deepest drawdown has been 44% against the US dollar, much less than the over 60% downturns seen in previous market cycles.
This data suggests there is growing investor support and more positive capital inflows into Bitcoin and Ethereum this cycle. The coins are not seeing the same extreme volatility and selling pressure compared to the past.
However, Glassnode points out that within crypto markets, Bitcoin dominance continues to increase in 2023. Bitcoin’s market capitalization has grown 110% year-to-date, compared to a 37% increase for the altcoin market cap excluding stablecoins. While altcoins have rallied against the dollar recently, Bitcoin remains the clear leader in terms of capital rotation between digital assets.