Bitcoin and Ethereum have proven to be the top-performing assets in the first half of 2024, outshining traditional investments such as the Nasdaq, S&P 500, oil, gold, the U.S. dollar, and government bonds.
Matrixport, in a recent post on July 1, highlighted that Bitcoin and Ethereum are leading the pack among various asset classes in 2024. The approval of spot Bitcoin ETFs in January played a significant role in this success, making it difficult for asset managers to ignore Bitcoin in their portfolios. As a result, Bitcoin has emerged as the best-performing asset of the year so far.
Philippe Meyer from BBVA shared during a panel discussion at the Web3 Corporate Innovation Day that adding a small percentage of digital assets like Bitcoin or Ether to investment portfolios has greatly enhanced performance. He suggested that allocating 3% to 5% of assets under management to crypto can make a significant difference.
In terms of price performance, Bitcoin has significantly outpaced the S&P 500 in 2024. With a year-to-date surge of over 46%, Bitcoin has outperformed the S&P 500, which has risen by 15%, indicating that Bitcoin’s performance is more than three times that of the index.
According to Cathie Wood’s ARK Invest’s annual Big Ideas report for 2024, Bitcoin has delivered impressive annualized returns compared to other major asset classes over various time periods. The report showed that Bitcoin’s annualized returns over seven years were 44%, significantly higher than the average 5.7% return of other major asset classes such as gold, commodities, real estate, bonds, equities, and emerging markets.
Looking back at the performance between 2011 and 2021, Bitcoin’s returns were exceptional, with an annualized return of 230%, compared to the S&P 500’s 14%. The report also highlighted that the optimal allocation of Bitcoin in a portfolio has been steadily increasing, reaching just under 5% in 2021. However, given Bitcoin’s outstanding performance in 2023, the optimal allocation has now risen to 19.4%.
In conclusion, Bitcoin and Ethereum have emerged as the top-performing assets in 2024, showcasing their potential as lucrative investment opportunities. Investors are increasingly recognizing the value of including digital assets in their portfolios to enhance overall performance and diversification.