Bitcoin outperformed the financial markets in 7 of the last 10 years
Bitcoin (BTC) has long been associated with high volatility, with the digital currency attempting to become a mainstream financial asset. Despite the volatility, the asset has achieved significant returns over the years, undermining traditional financial products.
Notably, over the past decade, Bitcoin has emerged as the most effective resource in seven of those ten years. Interestingly, during the three years Bitcoin failed to come out on top, the asset was the worst performer, data shared by investment strategist Raoul Pal on December 13 indicates.
Some of the products that outperformed Bitcoin over the seven years include the S&P 500 index, the Dollar index and the Fed balance sheet.
Bitcoin’s lowest returns have coincided with the asset’s phases of operating in a bear market, such as in 2014 when the Bloomberg Bitcoin Galaxy Index recorded a performance of -57.51%, while in 2018 its value was -74.28%.
Bitcoin’s Performance in 2022
Furthermore, Bitcoin is also ranked as the worst performing asset in 2022, with a return of -61.97%. In particular, Bitcoin’s 2022 performance has emerged with the asset mainly correlated with traditional financial products such as stocks.
At the same time, both asset classes have been affected by soaring inflation and the threat of increased interest rate increases, which have pushed investors to the sidelines.
Furthermore, Bitcoin and the crypto market are trying to recover from a series of high-profile events such as the Terra (LUNA) ecosystem crash and the FTX cryptocurrency exchange collapse along with a series of crypto bankruptcy filings. The events have partly resulted in questions about the sustainability of the crypto market.
The result has also potentially resulted in institutional investors overlooking Bitcoin despite playing a crucial role in the asset’s 2021 all-time high of nearly $69,000.
It’s worth mentioning that Bitcoin’s performance comes despite the cryptocurrency operating in a highly unregulated environment. Regulatory uncertainty is actually considered to affect the asset’s return in the future. However, there is progress from various jurisdictions attempting to adopt relevant jurisdictions for the sector.
Bitcoin’s future
Besides underperforming in 2022, Bitcoin is looking to end the year on a high, with the flagship cryptocurrency showing signs of a bullish breakout, coinciding with a slowing inflation rate in the US.
Likewise, as Bitcoin attempts to reclaim the $18,000 spot, the crypto community remains over 80% bullish on assets moving into 2023.
Disclaimer: The content of this page should not be considered investment advice. Investment is speculative. When you invest, your capital is at risk.
