In the first half of 2024, Bitcoin and Ethereum have overshadowed traditional investments such as the Nasdaq, S&P 500, oil, gold, the U.S. dollar, and government bonds. Matrixport’s July 1 post highlighted that both cryptocurrencies are leading the pack halfway through the year.
The approval of spot Bitcoin ETFs in January played a significant role in the success of Bitcoin in 2024. Asset managers no longer had excuses to exclude Bitcoin from their portfolios, leading to Bitcoin being the best-performing asset so far this year. Philippe Meyer from BBVA also recognized that adding a small portion of digital assets like Bitcoin or Ether greatly improved the performance of investment portfolios.
Bitcoin’s price performance in 2024 has far exceeded that of the S&P 500. With a remarkable 46% year-to-date surge, Bitcoin has outperformed the S&P 500’s modest 15% rise by more than three times. Cathie Wood’s ARK Invest report for 2024 highlighted Bitcoin’s exceptional annualized returns when compared to other major asset classes over varying time periods.
Bitcoin’s annualized returns over seven years were an impressive 44%, contrasting with the average 5.7% return of gold, commodities, real estate, bonds, equities, and emerging markets. During the period of 2011 to 2021, Bitcoin’s performance was unmatched, delivering annualized returns of 230% compared to the S&P 500’s 14%. Following a successful year in 2023 with a value increase of over 150%, the optimal allocation for Bitcoin has now risen to 19.4%.
Overall, the performance of Bitcoin and Ethereum in 2024 has solidified their position as top-performing assets, outshining traditional investments and showcasing the potential of digital currencies in the financial market. As the year progresses, it will be interesting to see how these cryptocurrencies continue to evolve and shape the investment landscape.