Bitcoin may be transitioning into a new phase of strength relative to traditional markets as inflation remains persistent and pressure builds in the bond market, according to Risk Dimensions CIO Mark Connors.
Connors, who previously served as global head of portfolio management at Credit Suisse, highlighted that bitcoin has recently ended its longest period of underperformance versus the S&P 500—a 142-day stretch that concluded in early May. The move, he said, could mark a turning point for the asset.
In his view, bitcoin has moved beyond a prolonged consolidation period and is beginning to enter a phase of relative outperformance. He suggested that its recent lag behind traditional markets is likely over.
The shift is unfolding against a backdrop of ongoing macroeconomic uncertainty, including stubborn inflation, elevated oil prices, and unclear interest rate direction. Connors noted that bonds, typically considered a safe haven, are facing growing challenges in a prolonged high-rate environment.
He added that bitcoin often reacts negatively during the initial stages of market stress but tends to recover faster than other asset classes. As such, it may be well-positioned to outperform both equities and fixed income as markets contend with continued economic pressures.
Connors also pointed to geopolitical tensions and persistently high energy costs as key drivers of the current environment, both of which continue to fuel inflation concerns. In response, he emphasized the importance of technological progress as a means to counter these forces.
He highlighted the increasing overlap between artificial intelligence and blockchain technologies, noting that businesses are exploring decentralized systems to enable automation and machine-driven transactions.
“Technology is ultimately the path through inflationary pressure,” Connors said.
He also drew comparisons to market dynamics in 2020, when gold initially outperformed during the early stages of the pandemic before bitcoin staged a significant rally. According to Connors, a similar rotation may now be underway.
“Gold has already had its move,” he said. “Bitcoin is now entering its next phase of growth.”
