Bitcoin-priced stocks have become cheaper and are approaching their all-time low.
- Bitcoin has outpaced the growth of the top five technology companies collectively known as FAANG.
- Tesla Inc. Is the only positive share among top companies to rise 68% in bitcoin.
- The market is showing disunity with value-based equity investments, especially in the TSLA, as economic stimulus propels popular assets.
Bitcoin posted an annualized gain over the stocks of leading tech companies such as Facebook, Amazon, Apple, Netflix and Google, including the S&P 500.
The only company that is growing in terms of BTC is Elon Musk’s Tesla.
Bitcoin’s growth of 400% since 2019 has outpaced the growth of shares of leading technology companies.
The relative share price in BTC is close to new lows that were hit during the peak in Bitcoin price in 2017.
The all-time lows for AAPL / BTC and AMZN / BTC are 0.0243 BTC and 0.0638 BTC, respectively. They are currently trading at 0.0326 BTC and 0.0785 BTC.
While the price of bitcoin has doubled from its all-time high, the price of tech stocks has risen over the same period.
Following the shock of the pandemic in March 2020, FAANG’s P / E ratios surged in the second quarter of 2020 as share prices surged to new highs.
The P / E ratio of a share determines how many times a share’s price is valued compared to a company’s annual earnings per share. Higher P / E ratios indicate overvaluation.
Tesla posted the strongest gains as its P / E soared above 1,400 from zero early last year. In fact, TSLA is the only leading tech company to see positive gains over Bitcoin, growing over 700% since January 2020.
The above points to the propensity of investors to revalue upcoming assets as the old leaders become less attractive.
The rise in the P / E of stocks following the pandemic shock in March indicates the effect of QE measures taken by governments through low interest rates, fiscal and monetary stimulus.
If the macroeconomic trend continues, Bitcoin’s uncorrelation with the economy could lead to a continued fall in price versus BTC as it becomes a popular inflation hedge.