Bitcoin surged 153.1% in 2024 outperforming gold and the S&P 500 with record-breaking growth.
Institutional adoption and expected favorable regulations fueled Bitcoin’s rise above traditional assets in 2024.
Bitcoin’s volatility remains a risk despite its impressive growth and outperformance of traditional assets.
Bitcoin has surpassed NASDAQ 100, gold and S&P 500 yearly returns with 121% in 2024. Bitcoin hit a new all-time high of more than $108,000, a huge milestone for the cryptocurrency.
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Several factors contributed to this rise, including increased institutional interest, favorable regulatory reforms, and growing speculation regarding US digital currency regulations. These factors enabled Bitcoin to outperform traditional assets hence establishing its position as a major investment option.
Bitcoin vs Traditional Assets
Bitcoin's growth in 2024 exceeded many traditional assets. With a return of 153.1%, it outperformed gold and the S&P 500 which had returns of 27% and 25% respectively. Despite its spectacular returns, Bitcoin's volatility continues to be a concern for investors. Gold, often seen as a safe investment, continued to attract those looking for stability.
The S&P 500 also performed well, with strong results from sectors like tech and healthcare. Traditional assets, like bonds and real estate, continue to have an advantage in terms of predictability.
Bonds, particularly U.S. Treasury bonds, provided reliable returns amid economic uncertainty. Despite the Federal Reserve hiking interest rates, bonds remained a safe haven for investors.
Similarly, the real estate market showed strength, with strong demand for housing driven by low interest rates. However, growing building prices and labour shortages posed obstacles.
What’s Driving Bitcoin’s Surge?
Bitcoin's 2024 price surge was caused by a number of events. The approval of Bitcoin ETFs in the United States, which attracted institutional investors, had a significant impact. A favorable political climate for cryptocurrency also contributed to increased confidence.
Bitcoin's status as a hedge against inflation and economic instability makes it very popular during periods of market volatility.
While Bitcoin’s performance was outstanding, it is important to remember the risks. Its volatility and lack of clear regulation may make it unsuitable for all investors. Investors are encouraged to diversify their portfolios to mitigate volatility of the market.
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