- Bitcoin has outperformed traditional assets in terms of annualized return value.
- While this investment proved to be beneficial for many, still seems to be lucrative for some investors.
With the emergence of Bitcoin, several industries were revolutionized by its features. It encouraged various decentralized technologies to be introduced while working as an underlying motivation for other vast-scale blockchain networks. Bitcoin is one of the most recognized cryptocurrencies, making it a safer option. Yet, its volatile price changes can make it less reliable.
What is Bitcoin?
Bitcoin’s introduction in 2009 disrupted various financial systems as a cryptographic currency while gaining substantial wider adoption across the globe. It possesses both equity and commodity properties and becomes an investment option in the market. It was the first cryptocurrency ever developed and was introduced far before other blockchains, which made it a boon for a decentralized ecosystem.
With a large number of users, it became a major challenge to be accessed publicly, which compromised privacy. Its developer’s identity is anonymous in the world of blockchain. It left the whole community with only one name (Satoshi Nakamoto), while their real identity remains a mystery.
How has Bitcoin Overpowered Traditional Assets?
Bitcoin has surpassed traditional assets in the last few years. While Bitcoin faced a roller-coaster of significant rises and falls in its value, it became a lucrative investment option for many. It became one of the best-performing assets of this decade as it returned far more value than the NASDAQ 100.
This gave rise to a question among investors, where to invest for profitable returns as traditional assets don’t prove to be much more valuable compared to cryptocurrencies? Before deciding on an investment plan and making a portfolio, it’s important to know how Bitcoin leads traditional assets and stands apart from assets like stocks, commodities and real estate.
Bitcoin paved its way ahead of other investments by making a cumulative gain of 20,000,000% and becoming a top performer since 2011. This outperformed the gains of the NASDAQ 100 and US Large caps, with a return value of approximately $3000. In a certain period, it returned an annualized return of 230%, which is 10 times more than the return of NASDAQ, which was the second-best performing asset in the market at that time.
US Large caps acquired an annualized return of 14%, while gold recorded a return of 1.5%. Bitcoin’s asset value is seeing no decrease in its annualized return even after its market volatility and it consistently becomes one of the best investment options in a certain period.
Bitcoin vs Stocks
The most powerful stock exchange in the world is the NYSE (New York Stock Exchange), which also formed the NYSE Board long before 1817. Here, the introduction of stock ownership and exchange built a prosperous system for a lifetime. Bitcoin’s inception gained rapid traction, leaving many investors thinking about reallocating their stock portfolios.
Meanwhile, stocks specify a fractionated ownership interest in a business. A user holding multiple shares in a company represents their ownership over a part of the company’s capital. Investors are rewarded with the potential success of a company. A company’s stock rise is a result of the company’s underlying success. These investors are incentivized only when their holding company performs well.
Conclusion
People often choose Bitcoin because of its unmatchable potential and increasing graph, while traditional assets are nevertheless chosen because of their old ways. Trading bots like hacks are being introduced every day to develop automated trading but the software systems still have their limitations. It’s up to an investor or trader to decide how they want to invest their capital. One should always look out for a reliable option as per their preference.