Crypto vs. Equities: A Performance Showdown in 2024
- Sr. Analyst
- Dec 15, 2024
- 2 min read
As we approach the end of 2024, the financial markets are offering stark contrasts between the explosive growth of cryptocurrencies and their related assets, and the steady reliability of traditional equity funds. The numbers tell a compelling story for investors weighing their options while comparing Crypto vs Equities.
Bitcoin Shines Bright in 2024
Bitcoin (BTC) has cemented its position as a high-performing asset this year, delivering a 17.6% return over the past month and a staggering 145% over the last year. Over the 5-year timeframe, Bitcoin's performance is unparalleled, soaring 1338%, driven by increasing institutional adoption, its "digital gold" narrative, and growing interest amid inflation concerns.
MicroStrategy (MSTR), a company heavily invested in Bitcoin, outperformed even BTC itself, with a jaw-dropping 616% annual return and an astronomical 2710% over five years. Its aggressive Bitcoin acquisition strategy has turned the company into a leveraged play on the cryptocurrency's price movements.
Bitcoin-focused ETFs, such as iShares Bitcoin Trust ETF (IBIT) and 2x Bitcoin Strategy ETF (BITX), have also delivered strong returns. IBIT rose 117.5% over the past year, while the leveraged BITX surged 177%, reflecting growing demand for regulated and diversified crypto exposure.
Traditional Equities Show Resilience
In contrast to crypto’s meteoric rise, traditional equity funds like SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust (QQQ) have demonstrated steadier, more predictable growth. SPY, a benchmark for the broader U.S. equity market, gained 28.74% over the past year and 90.41% over the past five years, showcasing its appeal to conservative investors seeking long-term stability.
QQQ, which tracks the tech-heavy Nasdaq 100, outperformed SPY slightly, with a 32.8% annual gain and a 156% return over five years. The fund has benefited from the dominance of big tech companies, such as Apple, Microsoft, and NVIDIA, as these firms continue to drive innovation in artificial intelligence and cloud computing.
Crypto Volatility vs. Equity Stability
The data highlights a clear trade-off between the high-risk, high-reward nature of cryptocurrencies and the relative stability of traditional equity markets. Crypto-related assets like BITX and MSTR offer outsized returns but come with significant volatility, making them ideal for investors with an aggressive risk tolerance. Meanwhile, SPY and QQQ provide more reliable performance for those prioritizing capital preservation.
What Lies Ahead in 2025?
As we enter 2025, investors should prepare for continued volatility in the crypto space, fueled by evolving regulations and macroeconomic shifts. Bitcoin’s dominance and adoption are likely to grow, but traditional equities remain a safer bet in uncertain times. Diversifying across both asset classes could offer the best of both worlds—capturing crypto’s upside while anchoring portfolios with stable equity returns.
Whether you’re a risk-taker or a cautious investor, the year-end data underscores one universal truth: understanding your financial goals and risk tolerance is key to building wealth in today’s complex markets.
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