April 21, 2021

Investing in Bitcoin versus other assets

After the recent rally in bitcoin, everyone again wondered how cool it would be to buy a crypt for ten years back. But how much more profitable it was than other options, few know. Therefore, we decided to take a look at the performance of bitcoin over 10 years against other assets - and share our observations with you.

Investing in Bitcoin versus other assets

Even before the statistics were collected, it was clear that bitcoin would easily overtake the rest of the assets, but it is still difficult to believe in the numbers before our eyes. The total return was 14.666.567% (14.6 million percent!) Or 222.2% per annum. Bitcoin is a rare case of explosive growth sinceultra-low base. At the end of 2010, all bitcoin in the world was worth only $ 1 million (about $ 0.5 apiece). For comparison, now it is only 20 coins, and those who accidentally received a couple of coins a dozen years ago have become millionaires.

Note that the rate of the crypto asset was extremely volatile, in 2013 the price increased 55 times, only to fall more than twice. You can notice a certain cyclical trend with a length of about 4 years where the price of the cryptocurrency shows an abruptgrowth and then collapses, playing back overgrowth. If the trend continues, we can well expect a powerful pullback in bitcoin prices sometime in 2021-22, the first signs, which we already saw in February, when bitcoin quotes fell by more than 20%.

The results of other assets are much moredown to earth, even though the past decade has been one of the most profitable in the history of the market (thanks to endless support from governments around the world).

The entire decade has passed under the banner of the technology sector. We've all seen the incredible growth of Apple, Amazon,Facebook and other giants, and their investors richer by 20% per annum, which is twice as fast as the historical return of the US market. The rest of the companies moved much closer to historical norms, which once again shows exactly where all the liquidity in the US markets is gathered.

Investing in Bitcoin versus other assets

Commodities were the biggest disappointment ... This is the only group of assets where investorslost money. China was the main source of demand for resources in the early 2000s, which quickly pushed prices up across all categories. However, after 2008, the world economy did not show significant growth, which led to almost a decade of stagnation in commodity prices. We are seeing a reversal of this trend now. as investors expect economic growth and inflation to be most beneficial for this group of assets.

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