The recent Pfizer’s announcement of a successful Covid-19 vaccine sparked an immediate rally of stocks worst hit by the pandemic response. The rally helped major indices such as the New York Stock Exchange (NYSE) Composite Index and Europe’s Stoxx to go up by about 4%. On the other hand, stock market that benefited from lockdown restrictions went down as the vaccine raises hopes for a return to normal life. Still, it seems the same vaccine hopes did not dampen interest in bitcoin, another major beneficiary of lockdown restrictions. Bitcoin continues to trade above $15,000 in the past 48 hours after the vaccine announcement.
After initially crashing alongside traditional markets earlier in the year, bitcoin recovered quicker as more businesses and individuals explored the possibility of using the cryptocurrency for payments. Between March 12–the infamous ‘Black Thursday’–and October 1, bitcoin increased more than 260%, making it one of the best-performing assets in 2020. Meanwhile, a series of announcements by large investors that they are purchasing bitcoin, starting in early October helped to spark another bitcoin rally. Additionally, data also indicates that the excitement around US Elections may have helped BTC to go past the 2018 year high.
Yet when Pfizer announced that its vaccine had been shown to be more than 90 per cent effective in a late-stage trial, the value of bitcoin did not change. Instead, it is traditional stocks that rallied with the NYSE Composite Index going up 500 points from 13,214 points on November 6 to 13,726.
An analysis by one publication reveals that stocks of US airlines led the rally with 15%, while IAG, the parent to British Airways closed the day with a 25%. Airbus was up 19% on the day while Rolls Royce gained 44%. Other gainers like JPMorgan Chase and Bank of America which advanced more than 13%.
On the other hand, stocks of companies that are seen as beneficiaries of the pandemic went down after announcements about covid-19 vaccine. Zoom fell 17% as did Netflix (7%) while Amazon, one of the biggest beneficiaries of the pandemic, went down almost 4% on one day. Some of these companies face a reversal of fortunes if and when the Covid-19 vaccine becomes available.
Despite benefiting from lockdown measures, the data shows that bitcoin’s performance is not tied to events that influence traditional markets. As Markets.bitcoin.com data reveals, the digital asset fell marginally from $15,563 on November 6 to $15,152, some 72 hours later.
As a result, bitcoin is exhibiting signs that it belongs to an alternative asset class. The top crypto’s decoupling from traditional markets only makes it more appealing to investors and traders searching for a better store of value.