Shares of iShares Bitcoin Trust ETF (IBIT 5.53%) surged as much as 4.9% higher on Monday, reflecting an identical Bitcoin (BTC 4.74%) gain over the weekend.
The bulk of the leading cryptocurrency's gains were spread across a 2.5% jump on Sunday and another 2% surge near 10 a.m. Monday. Of course, investors in the exchange-traded fund (ETF) simply experienced a higher opening price followed by today's smaller increase.
By 3:30 p.m. ET on Monday, Bitcoin and the popular ETF had backed down to a 4.6% gain from last Friday's closing bell.
NASDAQ: IBIT
Key Data Points
Almost everything's up today, including Bitcoin
Monday was a generally bullish day for investors (apart from plunging oil prices). The major stock indexes posted modest gains; gold prices rose to another all-time record; and many cryptocurrencies bounced back from last week's price drops. Last Thursday's unflattering inflation report started the instability, followed by a potential government shutdown.
The shutdown still looks plausible, but it's hard to predict its effects on the American economy and investor markets. But the S&P 500 (^GSPC 1.17%) is back where it was before the spooky inflation report. Bitcoin and the iShares Bitcoin Trust ETF are showing similar patterns.
CRYPTO: BTC
Key Data Points
Bitcoin's identity crisis continues
It's kind of funny how tightly Bitcoin (and its spot-price ETFs) are tracing the stock market in times like these -- in brief time spans. The so-called "digital gold" was supposed to be detached from stock market trends, acting as a long-term hedge against broader market trends.
Image source: Getty Images.
Then again, I'm not talking about a multiyear time period here. Bitcoin's market-tracking price swings took place over one weekend and the following Monday. And with a market-beating 79% price gain over the last 52 weeks (versus a 15% gain in the S&P 500), Bitcoin is holding its own in the longer term.
So if you're looking for a hedge against volatile stock markets right now, Bitcoin and its ETFs actually make some sense. The economy-based price moves of the weekend seem to undermine this theory, but again, that's comparing short-term apples to long-term oranges.
