Bitcoin and Ethereum have emerged as the most profitable assets in the first half of 2024.
The cryptocurrencies have outperformed various traditional investments, including the Nasdaq, S&P 500, oil, gold, the U.S. dollar, and government bonds.
Bitcoin and Ethereum Lead Asset Classes in 2024
According to a July 1 X post by Matrixport, “2024 is halfway through, and as we enter the third quarter of the year, Ethereum and Bitcoin are once again leading the way among other asset classes.”
#Matrixport
Today-Jul 1: #Crypto Is The Best Asset Class YtD
#BTC #ETH #cryptocurrency pic.twitter.com/L8HxDwFRvP
— Matrixport Official English (@Matrixport_EN) July 1, 2024
According to Matrixport, the approval of the spot Bitcoin ETFs in January has been an important factor, eliminating excuses for asset managers to exclude Bitcoin from their portfolios. They emphasized that BTC is once again the best-performing asset so far this year.
Supporting this viewpoint, Philippe Meyer from BBVA, during a panel at the Web3 Corporate Innovation Day, said that the firm had observed that introducing a small portion of digital assets like Bitcoin or Ether is “greatly improving the performance” of investment portfolios.
He noted
“So if you add something like 3% to 5% of your assets under management in crypto it’s really making all the difference.”
According to Matrixport, in 2024, Bitcoin’s price has dramatically outpaced the S&P 500. Since the beginning of the year, Bitcoin’s price has surged over 46% year-to-date (YTD), compared to the S&P 500’s 15% rise, indicating that Bitcoin has outperformed the index by more than three times.
Bitcoin’s Annualized Returns Outshine Major Asset Classes
Cathie Wood’s ARK Invest, in its annual Big Ideas report for 2024 examined the performance of various major asset classes over different time periods.
The report revealed that over various time periods spanning seven years, Bitcoin’s annualized returns were 44% when compared to the average 5.7% return of other major asset classes, including gold, commodities, real estate, bonds, equities, and emerging markets.
Excluding the downturn in 2022, Bitcoin’s performance between 2011 and 2021 was unmatched, delivering annualized returns of 230%, compared to the S&P 500’s 14%.
The report also found that the optimal allocation of Bitcoin in a portfolio has been steadily rising, with it increasing from 1% in 2017 to just under 5% in 2021. Given Bitcoin’s performance in 2023, when it increased in value by over 150%, the optimal allocation has now increased to 19.4%.
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