Market Commentary
Market Commentary: Climbing The Wall of Worry
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March 29, 2022

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Bitcoin is no stranger to the “wall of worry” – the rally in March now brings the asset to year-to-date highs

Key Takeaways:

  • Bitcoin turns positive year-to-date, outperforming both traditional equities and fixed income in a “down-year” - We offer a near-exhaustive list of reasons for bitcoin’s rally, up 35.6% from the lows in late January
  • Don’t miss the best weeks: time in the market beats timing the market
  • Bitcoin’s valuation – utilizing the MVRV multiple – illustrates growing demand and attractive opportunities for long-term investors
  • Seasonality points to a strong April in which bitcoin averages a 21.9% gain over the last 5 years (2016-2021)


And just like that, bitcoin is positive year-to-date.

After declining as much as 25.3% from the beginning of the year and 47.8% from the highs in November, bitcoin has now bounced 35.6% from the closing lows on January 23rd.

What has changed? Well, overhangs continue to be removed. Monetary uncertainty drove much of the decline since November, and now, the market took in-stride the first rate hike in over three years. Geopolitical risk is present, but the potential for a ceasefire has risen, and overall volatility has been reduced with the VIX nearing 20.

Through the hysteria, bitcoin is now outperforming both US equities and fixed income, with YTD returns as of Monday’s close of Bitcoin +3.5%, S&P 500 -3.7%, Nasdaq Composite     -8.1%, and Barclay’s Agg -6.9%. Gold has outperformed slightly now, +5.1% YTD (but we point out just +15.3% in the last 10).

As there are always reasons to be bearish and there is never an “all clear signal”, this most recent price action is another example that time in the market beats timing the market. Those that sold on the uncertainties and risks at any point this year are now “down on the trade,” with BTC closing Monday at a year-to-date high of $47,967.

And while bitcoin is more volatile than equities – relatively, its performance is quite strong. The asset continues to bounce off the lows quicker and with more punch. While correlations have technically risen, as of now, equities and bonds are negative YTD, and bitcoin is positive - that says something.

Bitcoin’s return last week of 11.6% was the 27th best in the last three years. We take the time to illustrate the risk in missing the 5 or 10 best weeks versus buying and holding over the same period:

Some of the many reasons we believe bitcoin has rallied:

  • Rate hikes and calls for 50bp increments taken in-stride and further talks of ceasefire in Europe as diminishing overhangs, with lack of bearish follow through since January 23rd lows;
  • President Biden’s executive order and greenlight, removing reason for hesitancy from many institutional investors;
  • Comments from Treasury Secretary Janet Yellen on March 25th: “There are benefits from crypto and we recognize that innovation in the payment system can be a healthy thing.”;
  • The bounce in stocks (SPX +9.7%, Tech +13.9%) highlighted in in our tantrum table (pg 3) and likely some short covering;
  • “Extreme fear” levels in the crypto Fear & Greed Index and the potential for a “not all that bad” rally higher;
  • Attractive valuations (MVRV pg 2), and strong seasonal trends in April (pg 2) supporting risk to the upside;
  • Around 27,000 of bitcoin purchases by the Luna Foundation and the commitment of $10bn total for stablecoin reserves
  • The rally above the 50D moving average of $41,300.


Bitcoin’s valuation remains attractive for long-term investors, with MVRV recently finding support at 1.5x. This multiple compares market capitalization with current market prices versus the price each bitcoin last moved “on-chain”. This provides a multiple of market price versus the average “on-chain cost basis.”

Historically, MVRVs <1 have been the best-case scenario for buyers, but this has not occurred since the highly polarized period in 2018 and the broader cascade in the covid-19 pandemic. Now, low-end multiples have risen, with a low of ~1.5x in both the 2021 and now 2022 pullbacks. This is likely to do with significantly growing demand for bitcoin as a traditional investment.

Recently, market tops have had MVRV valuation multiples in the 3, 4, and even 5+ range. This was experienced in Dec 2017 (4.8), April 2021 (3.9), and November 2021 (2.9).

At Monday’s close, MVRV stood at 1.9x, and thus, bitcoin has more “room to run.”


As the first quarter nears an end, it appears that bitcoin has weathered two of three negative seasonality months, January and March.

Thus far, this year’s returns are as follows: January -17.0%, February +8.4%, and March To Date +15.2%. Recent performance has propelled bitcoin to positive on the year, up 3.5% as of Monday’s close.

Now, going forward, April has historically been a strong month for bitcoin as well. From 2016 to 2021, bitcoin has rallied an average 21.9% in the first month of the second quarter. Seasonality trends are also strong for the month of May and June. (Side note- the S&P 500 has also experienced positive returns in every April, May, and June of ‘16 – ’21 aside from May ‘19).

This to us continues to illustrate that risk is skewed to the upside. Bitcoin has remained resilient through monetary and geopolitical uncertainty, the YTD lows are still January 23rd, and now, seasonality points to a strong second quarter.

Click here for the full PDF. As always, please reach out with any questions or comments.

Stay tuned,

Joseph Orsini, CFA
Director of Research

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