Bitcoin Is Outperforming Stocks And Gold. Will It Continue?

0:00Uncertainty is everywhere, investors are freaking out, fear is taking over the market and people want to understand what's going to happen to their portfolio. Well, yesterday marked the 15 days since the start of the Iran bombings. Well, the United States and our allies have hit a report in 6,000 targets since the start of the conflict. The straighter who mose remains closed and there is no clear end date in sight. Over those 15 days, we have seen most asset prices fall and investors are trying to make sense of all the uncertainty. The Nasdaq is down 2%. The S&P is down just over 3%, gold is down 3.5%, and TLT bonds, they have fallen nearly 5% since February 28th. This lack of performance in stocks in particular is noteworthy. The underlying fundamentals of these businesses has not really changed, yet investors are dumping them. Opening Bell's fill Rosen writes that the Iran war, inflation fears and oil shock, haven't changed the fundamentals driving the stock market. Actual earnings momentum is strong. 100 earnings are also still robust. Headline uncertainty hasn't derailed the nuts and bolts of the bull run.

1:02And we know from history that the S&P tends to do very well after geopolitical shocks and short-term sell-offs. Phil explains that the S&P 500 averages 14.2% in the 12 months after a geopolitical shock going all the way back to the Korean war. Bulls have a dominant track record when it comes to rebounding from uncertainty and history favors the optimist. But we don't need to dream about the future by looking at the past. We can see that the two shining lights in investor portfolios right now today, they're oil and Bitcoin. Oil is up approximately 45% because there is less global oil production going on. Remember, about 20% of all global oil flows through the straighter humoes, so if demand stays constant and supply drops materially, the price has to rise to accommodate everyone. High demand from your economics 101 class, it's essentially a law of the universe and it's still true today. And it doesn't seem to matter what announcements or actions are coming out of the White House right now. Many developed nations came together and they claimed that they were going to collectively

2:03release 400 million barrels of oil. Trump was rumored to use the War Powers Act to facilitate more oil production in Southern California. We even saw the headline that the US military and our allies would help escort various ships through the straight. None of it changed reality though. Secretary Scott Bessett went on CNBC this morning. He tried to calm the market. He tried to explain the US strategy moving forward and he reiterated that a very small number of ships are starting to successfully navigate the straight. Take a listen. President Trump has made it clear that his goal is to degrade and destroy the capabilities, the military capabilities of the regime to destroy the Navy, which is done, the Air Force, which is done. And now the bombing campaigns are going after the factories so that they cannot recreate these things. And we want to destroy the Iranian ability to project power outside of their borders.

3:03And you know, Brian, Iran was the head of the snake, the head of the snake for global terrorism everywhere. Whether it was through their proxies or, you know, there were Iranian guard members, the Invinous Weyla. There's hisbola in Colombia. They're interacting with Cuba. You know, everywhere that there is chaos and terrorists mayhem, it is Iran. So this is a generational opportunity to end this. And I don't want to say that the straight is, quote, closed. I don't like that term, but the reality is shipping traffic has fallen off a cliff. It's critical for oil, for gas, for fertilizers, helium, for semiconductors. Is there a plan to get that fully? I don't want to say reopen. There was a tanker that ran through today, fully operational and safe for all global shipping. Well, let's pull that apart. So we are seeing more and more the fuel ships start to go through. The Iranian ships have been getting out already.

4:05And we've let that happen to supply the rest of the world. We've seen Indian ships go out now. So the Indians who rely very heavily on Gulf oil, we believe some Chinese ships have gone out. So, you know, that, and that should start ramping up before there are any, the flotillas are protective armadas in the Gulf. So we think that there will be a natural opening that the Iranians are letting out. And for now, we're fine with that. We want the world to be well supplied. Now, it's great to hear the Treasury Secretary calmly explaining what is happening, but oil keeps appreciating in price and it likely is not going to come down until the conflict is over. The uncertainty fades and the straight is fully open to everyone again. We can see this oil price impact at the gas pump for everyday Americans right now. Charlie Blolo writes that gas prices in the US have moved up to $3.72 per gallon. That's the highest level since October of 2023.

5:08The 27% spike over the last month, that's the biggest we've seen in the past 30 years, three decades. But oil is not the only asset we're paying attention to in my opinion. The most interesting story in global finance is the performance of Bitcoin. The digital currency has been trading with high correlation to software stocks over the last few months. And frankly, Bitcoin investors have been disappointed. But right now stocks are down. As is gold, yet Bitcoin has appreciated approximately 10% since the first bomb was dropped in Iran. On one hand, Bitcoin is doing exactly what you would expect it to do. Bitcoin investors have long bragged about it being decentralized and uncorrelated. So the chaos hedge is doing its job during global turmoil. On the other hand, Bitcoin has become much more popular in institutional portfolios. You know, mass adoption. Bitcoiners think they're winning. But that's why the software stock correlation persisted. So my guess is that the non-institutional buyers are the ones that are rushing to the largest digital asset looking for safety. Institutions are selling Bitcoin. They're selling stocks. They're selling anything liquid, but it's retail that's going in and buying.

6:11It is almost like the world is remembering that Bitcoin is a borderless asset that operates outside the traditional financial system, or that Bitcoin serves as the most sensitive macro asset to global liquidity. So price appreciation will be basically guaranteed if nation states need to print money to keep funding the ongoing war for a prolonged period of time. If Bitcoin's outperformance continues, I would expect sophisticated investors to begin looking at the asset more deeply. They dream of having a non-sauver, geopolitical hedge to add to their portfolios from moments like this. Historically, these investors were highly skeptical of Bitcoin and their cryptocurrency industry at large. Many of them doubted the longevity of the asset, or they questioned the unpredictability of an 80-vol asset. But Bitcoin's volatility has come down. And now all of a sudden, everyone's interested. Those fears and concerns will quickly dissipate if Bitcoin is perceived to pass this geopolitical test. Investors put capital where their confidence grows. And Bitcoin's best argument right now, it's not hype, but instead it is substance because performance is a hell of a drug.

7:11The global asset scoreboard has Bitcoin beating most of its peers. If that outperformance continues, Bitcoin is going to have a lot of new friends in the coming months. Now, I think that this is a very dynamic situation. Things are changing and asset prices are going to move with the developments in the geopolitical stage. The president with a single tweet or the signing of a pen could completely change financial markets. And so it's important for you sitting at home to continue to pay attention. But right now, stocks are down. Gold is down. Bonds are down. But Bitcoin and oil are up. And my guess is that a lot of people are asking themselves, can my portfolio be resilient in a world where geopolitical uncertainty and conflict rules the day? You've seen a lot of different things come out of the White House and we've seen a lot of conflict break out across the world. What we're all trying to figure out is not how much money can you make in the short term. But instead, how resilient can your portfolio be? So 20, 30, 40 years from now, you can take your portfolio and you can hand it to your children or your grandchildren and say, I did the best I could.

8:15Here's what I came back with. That's it for today. I hope you guys enjoyed this video. Please remember to subscribe on YouTube and I'll see everyone live from the desk of Antidio Pompliano tomorrow.