MARKETBITCOIN

Bitcoin has outperformed the market for eight out of the past ten years, solidifying its position as the most outstanding asset class in terms of returns.

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Bitcoin has outperformed the market for eight out of the past ten years, solidifying its position as the most outstanding asset class in terms of returns.

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Impressive Performance over the Past Decade

Charlie Bilello, the founder of Compound Capital Advisors, compiled data from the global investment platform YCharts and found that Bitcoin outperformed the U.S. stock market for eight out of the past ten years, making it one of the best-performing investment assets globally.

The year 2013 was a remarkable year for Bitcoin, with an annual return on investment of a staggering 5,507%. Over the past decade, the annualized return rate for the Nasdaq 100 index was around 20%, while Bitcoin's profitability was 10 times that of the Nasdaq 100 index, at approximately 203%.

Almost all asset classes have shown positive returns from the past decade to the present, even low-volatility assets like the U.S. dollar and gold have average annualized returns of 0.2% and 2.2%, respectively. The only underperforming asset class is "commodities," such as oil, lumber, and natural gas, with an annualized return of -6.1%.

However, Bitcoin has not had smooth sailing every year. 2014 and 2018 were the two worst-performing years for Bitcoin, almost the worst-performing asset in the entire market. In 2014, Bitcoin's investment return was -58%, and in 2018, it was -75%.

Is Bitcoin Unqualified to be Considered an Asset Class?

Despite historical data showing that Bitcoin has brought investors far more gains than losses over the past decade, many individuals or institutions still do not consider Bitcoin as an asset class. In a conference call held by the U.S. investment bank Goldman Sachs in May of this year, it was stated that cryptocurrencies, including Bitcoin, cannot even be considered an asset class. They do not provide cash flow like bonds, cannot generate revenue through global economic growth, foster Ponzi schemes and money laundering, and also do not offer inflation hedging capabilities like gold. Goldman Sachs concluded in their presentation:

"We believe that if the appreciation of a security depends primarily on whether others are willing to pay a higher price for it, this is not a suitable investment for our clients."

At the time of writing this article, Bitcoin has broken through key resistance levels to surpass $19,600 once again, gearing up to challenge the $20,000 mark. Will Goldman Sachs eventually admit their misjudgment, or will the cryptocurrency community be left holding the bag once again?