In the midst of the year 2024, Bitcoin and Ethereum have emerged as the standout assets, outperforming traditional investments like the Nasdaq, S&P 500, oil, gold, the U.S. dollar, and government bonds. According to a recent update from Matrixport, these two cryptocurrencies have once again taken the lead among various asset classes. The approval of spot Bitcoin ETFs in January played a significant role in this surge, as it removed barriers that previously prevented asset managers from including Bitcoin in their portfolios.
Philippe Meyer from BBVA highlighted the positive impact of adding digital assets like Bitcoin and Ether to investment portfolios. During the Web3 Corporate Innovation Day panel, Meyer noted that introducing a small portion of crypto assets, around 3% to 5% of the total AUM, can significantly enhance portfolio performance. This sentiment was echoed by Matrixport, emphasizing that Bitcoin has been the best-performing asset in 2024 so far.
In terms of price performance, Bitcoin has outpaced the S&P 500 by a wide margin in 2024. The cryptocurrency has surged by over 46% year-to-date, while the S&P 500 has seen a more modest 15% rise. Cathie Wood’s ARK Invest report for 2024 further supports this trend, showing that Bitcoin has delivered annualized returns of 44% over various time periods, compared to the average 5.7% return of other major asset classes.
Excluding the downturn in 2022, Bitcoin’s performance between 2011 and 2021 was unmatched, with annualized returns of 230% compared to the S&P 500’s 14%. The report also pointed out that in 2023, Bitcoin’s value increased by over 150%, further solidifying its position as a top-performing asset. As a result, the optimal allocation for Bitcoin in investment portfolios has now increased to 19.4%.
Overall, Bitcoin and Ethereum have taken the financial world by storm in the first half of 2024, showcasing their ability to outshine traditional investments and deliver impressive returns. With continued adoption and recognition from institutional investors, these cryptocurrencies are likely to maintain their upward trajectory in the coming months.
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