- Bitcoin outperformed traditional assets over the last decade, delivering unmatched growth and reshaping investment perspectives.
- Despite its volatility, Bitcoin’s unique correlations with stocks and gold offer insights into its behavior as a growing asset.
Over the last decade, Bitcoin (BTC) has been very clear as an amazing asset, surpassing traditional assets including equities, bonds, and commodities, according to CoinGecko research. Given a startling 26,931.1% return on investment, a $100 Bitcoin purchase in 2014 would today be valued at $26,931. Though with great volatility, its astronomical performance shows its potential as a high-growth asset.
Short-Term Performance: Year-to-Date (YTD)
With a return of 129.0%, significantly more than gold’s 32.2% and the S&P 500’s 28.3%, Bitcoin became the top-performing asset in 2024 alone.
While US Treasuries gave moderate gains of 5.3% for 5-year bonds and 8.2% for 10-year bonds, crude oil suffered a minor drop of -0.13%. These findings show how fast Bitcoin can surpass traditional assets even within limited timeframes.
Looking ahead one year, Bitcoin’s performance is still remarkable with a 153.1% return. The S&P 500 showed 33.1%; gold trailed at 34.8%. These numbers highlight Bitcoin’s supremacy in recent years since it still attracts the interest of investors with growth orientation.
Bonds suffered in contrast from economic swings, with negative returns for both 5-year (-4.3%) and 10-year (-2.6%) Treasuries.
Treasuries and Bitcoin: Contrasting Trends Over Mid-Term Horizons
Rising as the top asset class during a three-year period, Treasuries represent a move towards stability in uncertain economic times.
Ten-year Treasuries came in at 218.0%; five-year Treasuries returned 267.8%. During this period, Bitcoin trailed bonds even if it still had a decent 79.0% comeback. With a healthy return of 53.1% and crude oil delivering a meager 6.1%, gold remained a safe haven throughout.
The five-year horizon presents a different picture, with Bitcoin recovering its top performance asset ranking. Comparatively, a return of 1,283.6% lagged behind the S&P 500’s 96.7% and gold’s 84.6%.
Bonds also did rather well; 10-year Treasuries at 149.9% and 5-year Treasuries at 157.1% With a return of just 25.3%, crude oil kept underperforming, therefore confirming its reduced appeal as a long-term investment.
Bitcoin’s Decade of Dominance and the Role of Traditional Assets
With an unmatched 26,931.1% return over the last ten years, Bitcoin shows great transforming power as an investment. Despite providing consistent growth, traditional assets fall short: the S&P 500 yielded a return of 193.3%, gold yielded a return of 125.8%, and crude oil only managed a 4.3% return.
With gains of 157.1% (5-year) and 86.8% (10-year), Treasuries kept their attraction for cautious investors. The ten-year performance of Bitcoin emphasizes its propensity to reward early adopters and underlines the dangers connected with its volatility.
Price Swings and Changing Correlations with Stocks
The amazing rise of Bitcoin comes at great price swings. Its price varied during the last ten years from $172.15 at a low to $103,679 at a peak. Driven by Bitcoin’s four-year halving cycles, this volatility consists of significant bull runs in 2017-2018 and 2020-2021 followed by dramatic falls surpassing 70% of peak values.
This volatility has drawn individuals looking for high-reward possibilities even while it may discourage risk-averse investors.
Regarding correlations, the interaction of Bitcoin with traditional assets offers more understanding of its special behavior. Reflecting its freedom from equity markets, Bitcoin historically showed a low connection with the S&P 500.
But starting in 2020, Bitcoin’s relationship with stocks has improved, especially in regard to major economic events like the COVID-19 epidemic.
On the other hand, Bitcoin’s relationship with gold has been more inverse, implying a changing investor inclination between the two assets in line with market swings.
Despite the term “digital gold” sometimes being applied to Bitcoin, it has yet to accurately mirror the stability of gold as a store of value. Short bursts of correlation during macroeconomic events draw attention to times when both assets respond in line with world affairs.
