Persistent inflation and a weakening bond market have set the stage for Bitcoin to enter a fresh era of outperformance against traditional assets, according to Mark Connors, Chief Investment Officer at Risk Dimensions.
Connors, formerly head of global portfolio management at Credit Suisse, noted that Bitcoin just exited its longest stretch of underperformance versus the S&P 500 on record: 142 consecutive days, ending in early May.
“We believe the period of underperformance is over,” Connors said in an interview. “We’re in a corrective phase that’s transitioning into a bullish reversal.” The shift comes as investors grapple with stubborn inflation, rising oil prices, and interest rate uncertainty. Bonds, traditionally viewed as safe havens, face increasing pressure as markets price in a “higher for longer” rate environment.
“Bitcoin always takes an initial hit but is always the first to recover,” Connors argued, adding that the digital asset can “navigate bad news and continue to outperform stocks and bonds even with structurally higher oil.” He attributed much of the macro headwinds to ongoing geopolitical tensions and elevated energy costs. This year, oil prices have stayed structurally high, fanning inflation fears while pushing markets to focus on technology and productivity improvements that could counterbalance those pressures.
In this context, AI and blockchain are becoming increasingly intertwined, with corporations seeking decentralized systems to power machine-driven trading and automation.“The only way through the inflation pressure is through technology,” Connors said. He also pointed to a shift in investor preference from gold to Bitcoin, drawing parallels to 2020 when gold rallied first during the early pandemic, then Bitcoin launched a powerful comeback. “Gold has already had its moment in the sun,” he said. “Now it’s Bitcoin’s turn for a revival.”