29 Oct 2019
For the traditional investor, it’s been hard to ignore the meteoric rise of Bitcoin. Following a few blistering years that saw its valuation skyrocket by an astounding factor, the world’s most valuable cryptocurrency is now up 250,000% in less than a decade.
Meanwhile, the S&P 500, widely considered to be one of the “go-to” benchmarks for American equity, has gained a comparatively paltry 147% over the same period.
The stark difference between the two asset classes is perhaps best reflected in their performance over the past couple of years. Considering Bitcoin's price in 2011, when it was less than $3, to its present value of more than $6,650. It is undeniable that Bitcoin has been one of the most lucrative investment in the financial markets. For those who invested in Wall Street’s finest stocks, however, it was a far different story with a decent growth over the years.
Using OnChainFX, an investment calculator that allows users to follow their ROI progress in multiple assets, including Bitcoin, it was found that investing in the digital currency in 2011 would have resulted in a 250,000 percent return on investment (ROI). Bitcoin has now outperformed the S&P 500 in each of the last eight years and has outperformed all major asset classes, including stocks, bonds, and real estate.
For many in the cryptocurrency community, this is no surprise. They believe that Bitcoin is not only an alternative to fiat currencies but also a viable alternative to traditional investment vehicles like stocks and bonds.
Many crypto bosses agree with this assessment including Roger Ver, CEO of Bitcoin.com, who recently tweeted that Bitcoin is the most profitable investment of all time.
In the tweet, which has since gone viral, Ver says:
“ Bitcoin has outperformed any other investment in the past 10 years with over 2,000% annual growth. If you bought $100 worth of bitcoin 7 years ago, you'd be sitting on $2 million today.”
Of course, while many crypto leaders are optimistic about Bitcoin’s prospects for success in the long run, others are skeptical about its ability to maintain such a high level of success.
As Bitcoin continues to grow, certain people in the industry have begun questioning what comes next.
“ It’s a shame that Bitcoin will go down in history as a great financial bubble because people will forget it was actually a very useful and interesting development,” said former head of the U.S. Commodity Futures Trading Commission J. Christopher Giancarlo, who is not exactly known for being an enthusiast of digital currencies.
He added: “We need to do whatever we can now to educate the public about cryptocurrencies so that they understand their potential value and how they might be useful in the way of payment systems, stores of value, and other financial services.”
While there’s no doubt that Bitcoin still has a long way to go before it can be considered a legitimate investment vehicle, its short-term success seemingly proves that it is here to stay.
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