In the first half of 2024, Bitcoin and Ethereum have proven to be the most profitable assets, surpassing traditional investments such as the Nasdaq, S&P 500, oil, gold, the U.S. dollar, and government bonds. Matrixport’s July 1 X post highlights this trend, stating that as we enter the third quarter of the year, Bitcoin and Ethereum continue to lead the way among various asset classes. This dominance is attributed to the approval of spot Bitcoin ETFs in January, which has encouraged asset managers to include cryptocurrency in their portfolios, with BTC emerging as the best-performing asset so far this year.
According to Philippe Meyer from BBVA, the introduction of a small percentage of digital assets like Bitcoin or Ether can significantly enhance the performance of investment portfolios. Meyer emphasized during a panel at the Web3 Corporate Innovation Day that allocating 3% to 5% of assets under management in crypto can make a substantial difference. This insight underscores the growing recognition of the value of cryptocurrencies in diversifying and strengthening investment portfolios.
In 2024, Bitcoin’s price has exhibited exceptional growth, outpacing the S&P 500 by a significant margin. With a year-to-date surge of over 46%, Bitcoin has significantly outperformed the S&P 500, which has risen by 15% during the same period. Cathie Wood’s ARK Invest report for 2024 further solidifies Bitcoin’s position as a top-performing asset, highlighting its annualized returns of 44% over various time periods, compared to the average 5.7% return of other major asset classes. The report also showcases Bitcoin’s exceptional performance between 2011 and 2021, delivering annualized returns of 230% compared to the S&P 500’s 14%.
Given Bitcoin’s outstanding performance in 2023, where it appreciated by over 150%, the optimal allocation for Bitcoin in investment portfolios has now increased to 19.4%. This significant increase in allocation underscores the growing confidence in Bitcoin as a lucrative investment opportunity with the potential for substantial returns. As investors continue to recognize the value of cryptocurrencies like Bitcoin and Ethereum, their role as key assets in diversified investment portfolios is becoming more evident.
