By CCN.com: The Bitcoin price has endured a vicious free-fall in mid-August. In the past week alone, the leading cryptocurrency has plunged by nearly 17%, and it’s currently hovering shakily near the psychologically important $10,000 level.
Bitcoin’s volatility is nothing new, but it tends to mask the undeniable fact that the cryptocurrency’s long-term returns are still clobbering the performance of the stock market and other traditional assets.
At the start of the year, the Bitcoin price was at around $3,800. This translates to an appreciation of approximately 160 percent year-to-date – even after this morning’s nosedive.
In contrast, traditional assets such as gold and stock indices have all returned less than 20 percent since the beginning of the year.
Gold, the legacy safe-haven asset, has appreciated by 18 percent in 2019. At the beginning of the year, an ounce of gold in the futures markets was priced at $1,283. Currently, it is trading at around $1,517 an ounce.
The S&P 500 stock market index, on the other hand, has gone up by roughly 13 percent. On January 2, the S&P 500 index was at 2,509 but is now at 2,840 following Wednesday’s bloodbath.
And if you think the S&P 500’s return is underwhelming, the Dow Jones Industrial Average has climbed just 9 percent for the year.
As an illustration of how much Bitcoin has appreciated since the year started, Morgan Creek Digital partner Anthony Pompliano noted that the cryptocurrency could fall even further and still dramatically outperform the S&P 500, which tracks a basket of large-cap stocks.
However, even though Bitcoin has made impressive returns this year already – Thursday’s drop notwithstanding – don’t bet on the “the sky is falling” headlines going away.
At least not anytime soon.
Click here for a real-time Bitcoin price chart.
Last modified: June 23, 2020 2:37 PM UTC