The growth of Bitcoin in recent years is highlighted by the asset’s significant return on investment (ROI)
Bitcoin growth in recent years has been marked by the asset’s substantial return on investment (ROI) that has depressed significant stock market indexes over the same period.
Bitcoin 5-year returns outperform world’s major indices average ROI by 1,645%
Compared to the S&P 500, Dow Jones Industrials, and Nasdaq indices, Bitcoin has recorded an average ROI of 1,645% over the past five years.
The digital currency’s return is 1.978% higher than Dow Jones’s. The asset’s ROI is also 1,734 percent higher than that of the S&P 500 index, which tracks the stock performance of the top 500 US companies. Elsewhere, Bitcoin’s ROI has surpassed Nasdaq by 1,221%.
Bitcoin ROI Tool compares BTC’s return on investment (ROI) to traditional assets with percentage values highlighting how crypto’s investments outperform other financial assets in a specific time.
Bitcoin ROI compared to major indices
Bitcoin’s high returns somewhat validate the perception that the cryptocurrency is a perfect path to generate high returns in a short time, considering that traditional ticker indicators have been around for decades.
Over the past five years, both asset classes have experienced monstrous highs and lows. Still, Bitcoin has come to prominence mainly due to a push after institutional investors entered the crypto space.
The growth trajectory of traditional assets was cut short with the arrival of the pandemic that led to a widespread stock market crash. At the same time, Bitcoin has suffered from the effects of regulatory uncertainty that has led to the historic crash of the digital asset and the crypto market.
Since the beginning of 2021, Bitcoin has experienced several bull runs and its all-time high price. As of press time, the asset is trading at $42,600, up more than 3,000% over the past five years.
Although Bitcoin is increasingly integrating with the traditional financial sector, assets and indices are two different asset classes. For example, indices track for-profit companies that control tangible products and services, while Bitcoin is a virtual currency.
It will be interesting to watch how Bitcoin compares to traditional securities products, with the two assets increasingly exhibiting historical correlation in the coming years. Bitcoin’s correlation with US tech stocks tracked by the Nasdaq index is notable.
The correlation currently portrays Bitcoin as a safe-haven asset that reliably resists rising inflation. The correlation between assets is also strengthening along with the tightening of the US Treasury yield curve amid high inflation.
On the other hand, higher volatility and increased correlation with traditional assets could reduce Bitcoin’s higher returns. It is worth mentioning that volatility has equally affected both Bitcoin and traditional assets over the past few months.
Furthermore, with Bitcoin advocates eager for the asset to fully integrate into the traditional financial space, digital currency is now emerging as a diversification option.
Bitcoin is now becoming a solid choice between conventional investors and traditional financial players like banks that offer related services despite the volatility.
Read more:
- Bitcoin Price Headed Toward $42,000 After Bulls Failed To Spark A Late-Week Turnaround
- Bitcoin Price And Ether Continue Falling; Other Major Cryptos Are Mixed