You probably noticed that the first half of 2019 has delivered handsome returns to crypto investors. Hopefully, you’re one of them 😎 Since we’re always on the lookout for things our users would like to learn, we took a look at the lessons we can draw from the first six months of this year.
Growth is all around
We’ll start with the easy part – comparing the returns of Bitcoin with the return of other asset classes (Asset what?):
- The best performing bond funds generated a return of about 5,7% in the first six months of 2019.
- Stocks have fared far better, with the Dow Jones Industrial Average generating a 13.9% return, which by historical standards is very high, especially for a six-month period.
- For comparison, another widely-used stock index, the S&P500, performed even better, yielding a 17.2% return, an even more impressive feat.
- As Bitcoin is often referred to as “digital gold,” let’s take a look at how gold performed in 2019 so far. On June 30, the price of gold was 10.2% higher than at the beginning of the year. Not bad for an old timer 😉
- Which ultimately brings us to Bitcoin. Feast your eyes on this – in the first half of 2019, Bitcoin gained an astonishing 189%!!!
Winter? What winter?
What does the above data tell us? Well, for one, crypto has apparently survived the bear market which plagued 2018. In 2019, the bulls have well and truly chased away the bears. In other words, we can say with great confidence that the crypto winter is over.
You may have heard this before, but it doesn’t hurt to repeat it: Bitcoin is still the best performing asset in the last 10 years, during which period it has (significantly) outperformed every other asset class.
Here’s a fun fact for you, courtesy of the great Anthony Pompliano (aka Pomp):
If you bought Bitcoin on any day since the very first day it ever was liquid, and you held it for three and a half years, you’ve made money.
Adding crypto to your investment portfolio
How about a quick, back-of-the-envelope calculation on why it’s wise to have at least some exposure in crypto?
Let’s say you got a nice Christmas bonus and were thinking of investing 1,000 EUR at the end of last year. What would happen if you put it all in stocks? We’ll be generous and assume you invested it in something that mimics the broader US market, i.e. the S&P500. On June 30, 2019, you would have 1,172 EUR on your account. Not bad!
What if you wanted to dip your toes in crypto, but remained fairly conservative and invested only 10% of that 1,000 EUR in Bitcoin, so 100 EUR in Bitcoin and 900 EUR in stocks? How much better do you think you would do? Prepare to be surprised, because what your balance on June 30 would show is – we kid you not – 1,343.80 EUR!
Last but not least, what if you decided to be bold and fearless and invest the entire 1.000 EUR sum in Bitcoin? By now, you should be feeling really good about yourself, as you would have a whopping 2,890 EUR!!! Or, in other words, that laptop we talked about in March 😉
Will growth continue?
In retrospect, investing in Bitcoin would have rewarded you nicely in 2019. But looking forward, what’s in store for you? Because we’re in crypto, not the fortune-telling business, you will forgive us for not saying what the price of Bitcoin will be in the future. We can, however, give you our insight into what we believe will drive further adoption of blockchain technology.
Maybe you’ve read stories of big, global companies thinking about implementing blockchain into their business models. We believe new entrants, especially prominent and influential market players like Facebook (with its Libra project), and even China will be the main driving force behind mass adoption of blockchain, making crypto available to hundreds of millions, perhaps even billions of people, which will sooner or later have an impact on market prices.
Our take would be that if you have not thought about investing in crypto, or you have, but haven’t made that leap of faith yet, now would be the time. And remember, patience tends to get greatly rewarded.