Bitcoin has done better than most financial assets in 2020 and is on the path to becoming one of the best financial bets for the year. Its price recovered after plunging in March, amid the COVID-19 induced sell-offs. It has since gained about 30% so far.

However, one little known digital coin has almost doubled in price since the beginning of the year, and it still shows more upside in its present momentum.

Tezos, trading under a sticker XTZ, has gained about 91% since the start of 2020. Tezos was trading at $2.56 at the time of writing this report, with a market capitalization of almost $1.817 billion, according to data obtained from CoinMarketCap.

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At the start of 2020, Tezos was the 15th most valuable crypto asset by market value according to the data. It has since managed to climb into the top ten most valuable cryptocurrencies and could surge past its crypto rivals with its current momentum.

Tezos, which was designed as a “self-amending cryptographic ledger” and uses the so-called verification model, has emerged a big fan of tokenized real-estate and security tokens.

“Tezos seems to be one of the most popular platforms for new projects to build on at the moment,” said Mati Greenspan, the founder of market analysis firm Quantum Economics told Forbes in a recent interview

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“Several projects that I’m currently advising are using it. As well, the tokenomics are structured in a way that a lot of the incoming supply is diverted to staking and taken off the market,” said Mati Greenspan, the founder of market analysis firm Quantum Economics.

In addition, after Bitcoin’s recent halving has made it harder to mine Bitcoin, many have suggested that miners (people who produce Bitcoin after a difficult task is completed) might as well switch their computing strength to other cryptos —potentially giving Tezos a boost.

With the COVID-19 pandemic still raging on and upsetting markets, Bitcoin has outperformed the Nigerian stock market and even most global equities; only performing worse than gold. Investors attribute Bitcoin’s performance to bets/bids that have been made to hedge against inflation.

In 2020, Bitcoin has only posted a loss of around 5%, compared to respective drops of 17.5% and 18% for the Nigerian and MSCI All-Country World Index. With a market capitalization of over $126 billion as at April 22, 2020, it is much bigger and more liquid than the Nigerian stock market (market capitalization less than $31 billion dollars —N11.793 trillion est. April 21, 2020).

Like stocks and other riskier assets, Bitcoin climbed up in the wake of massive stimulus packages launched by fiscal authorities and central banks around the world last month to ease the economic damage caused by the COVID-19 outbreak.

In addition, with a supply pegged at 21 million, its rarity gives it an intrinsic value and protects it from global central banks’ moves or policies that encourage inflation.

READ MORE: Bitcoin price under pressure, stays under $7000

However, in 2020, bitcoin performed poorly against popular safe havens like gold. Just last month alone, Bitcoin slumped more than 35%, showing that gold has proven far more resilient than Bitcoin

A pile of bitcoins

Bitcoin which is notorious for high price swings, has found its use as a means of digital payment and scared off institutional investors such as pension funds. It has however attracted hedge and quant traders, who make money on short-term price swings.

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As its volatility soared, major cryptocurrency exchanges saw huge movements in volume last month. Many speculators sold off the cryptocurrency (like other assets) to raise money.

“I’m long gold, I’m long bitcoin – we are seeing a monetization of debt like we have never seen in our lifetimes,” Novogratz said in a Monday interview with Bloomberg TV. “To me in the long run, that has to make hard assets look better.”

Bitcoin once tagged as a ‘safe haven’ asset, has recently proved bookmakers wrong again. On March 12, Bitcoin made further drastic losses, sinking from $10,000 to below $6,000 for the first time since May 2019 due to coronavirus scare.

At its current price of $5,500 on Friday, 03.05 pm Nigerian time, bitcoin seemed attractive to buy. However, investors’ bias was broken with heightened uncertainty in the global economic outlook.

A pile of bitcoins

For these reasons, we can expect that the current bounce towards $6,000 might be a temporary relief on the way down.

However, the sudden drop comes after months of stable price growth, which saw Bitcoin rose from below $6,000 at the start of the year to above $10,000 by late February.

[READ MORE: Cryptocurrency: Discern investors’ goldmine)

Chief Executive Officer, BitMEX, an exchange registered in Seychelles, Arthur Hayes thinks that the likely bottom for Bitcoin lies at around $6,000. As the flagship token suffered from the spread of the coronavirus, altcoins took a more severe hit with heavy losses seen across the board.

The latest crash appears to dispel this narrative, as it coincided with the sharpest rise in coronavirus-related deaths since the outbreak began.

Bitcoin bearish party seems to be utterly unstoppable. The selling pressure has been unrelenting on Thursday and could last throughout the day’s trading sessions. Data by CoinMarketCap shows that the market cap lost over $17 billion from the $223 billion recorded on Wednesday to $335 billion at the time of writing.

The reported trading volume is, however, on the rise, from $136 billion to $144 billion in the same period. Intriguingly, Bitcoin dominance has increased from 64% to 65.6%, to show that altcoins led by Ethereum have taken a huge plunge.

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On Twitter, CEO, Invest Diva, Kiana Danial, explained that the current development witnessed in the industry went contrary to the general belief of the market. According to him, the market is usually insulated from global threats like coronavirus.

He said, “What happened have left many disappointed, as the digital currency has not been acting as the ‘safe haven’ it promised to be”.

The dramatic loss in value mirrored the drop in stocks as well as crude oil, with the main markets reacting to further bad news about the coronavirus epidemic. In addition, global uncertainty suggests investors’ desire to close positions in risky assets such as cryptocurrency.

Denis Vinokourov, Head of Research for London-based digital asset firm, Bequant, stated on Forbes Magazine that the crypto market had declined “sharply” in the last 24 hours, with bitcoin falling more than 20% in an environment characterized with worries about coronavirus.

Another factor is the U.S. President Donald Trump’s latest travel restrictions and panic-driven selling witnessed in the market. He noted that the desire of investors to sell off their holdings triggered “a liquidity crunch as the cost of capital spiked up across crypto exchanges.”

In addition, President Trump, on March 11, banned travel for most of Europe to the United States and the equities markets reacted with further lows. These drastic measures might have resulted in steep losses that leave the traders in the cryptocurrencies markets clueless of what will happen next.

Bitcoin

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Furthermore, from a short term view, the impact of the global economy is very indecisive but bitcoin is currently trading like a risk on the asset. Despite having a negative correlation earlier, the cryptocurrency market may continue to fall in tandem with the global equities market and other leading assets apart from Gold.

However, we still believe in the long term fundamentals of bitcoin as an asset. At the moment, not many large financial institutions are investing in bitcoin or crypto assets, However, when there is regulatory and settlement risk, this will change. Once that happens, bitcoin will be on a par or overtake gold as the safe-haven asset.