Bitcoin Still 2019’s Best Performing Asset Despite Recent Slide

Bitcoin logo on circuit board, illustration

For bitcoin investors, 2019 has been something of a rollercoaster year. After regaining some of the ground lost in the crypto-winter of 2018, the last three months have seen the world’s leading cryptocurrency fall back on fears of being overbought.

With the final months of the year approaching, many bitcoin investors are hoping for a return of the late-in-the-day rallies of recent years.

Despite the challenges, bitcoin still stands head and shoulders above the rest. It is the best performing asset of 2019.

Bitcoin Up By 114% From January

According to Goldman Sachs, the best performing asset class of 2019 has been US tech stocks, posting a 31% growth. Yet compared to the returns posted by bitcoin (ignored by Goldman Sachs in their calculations), this is small beer.

On the same period, gold is up 17%. Meanwhile, the S&P 500 returned 21%. Those looking for a safe haven in US Treasury bonds have had even less to celebrate, with a 1.6% return.

Over the same period, Bitcoin has grown by 114%. An investor who backed bitcoin on January 1 would by now have doubled their money and then some. This is despite the undulations that chart the day-to-day, week-to-week trading in bitcoin markets.

Bitcoin finished Q3 at a respectable $8,303. This is down from the highs of June which saw the cryptocurrency return to $12,902. On January 1 2019, it was $3,801.

And analysts don’t expect that growth to slow down any time soon. According to Brad Keoun at CoinDesk, signs are pointing towards a renewed rally to year end. This could take BTC beyond June’s highs.

“Bitcoin prices have more than doubled in 2019, far outpacing the 31 percent return for U.S. tech stocks, which Goldman Sachs deems the best-performing asset class year-to-date. Outsize returns could attract interest from big investors in the yield-starved traditional financial markets. Executives at data firm Messari say bitcoin prices, currently around $8,200, could rally to a new high in the year’s remaining months, topping the $12,902 level reached in June.”

Yet for too many investors, particularly at an institutional level, bitcoin remains an untouchable proposition. At least, for now.

Institutional Investors Starting To Warm Up To Bitcoin

Institutions like Goldman Sachs and JP Morgan have already made their feelings about bitcoin public. There has been high-profile criticisms from leading executives. But as bitcoin and cryptocurrency becomes ever-more established by the day, these views are increasingly looking out of date and ill-informed.

Bitcoin has only been around since 2009. This is a blink of an eye, as far as financial markets are concerned. Especially where regulated investors are involved, taking a punt on what looks to them like a speculative asset with patchy fundamentals they don’t yet understand continues to feel risky.

There are signs that the mood is changing. Institutions of all pedigrees are warming to crypto as an asset class.

Keld van Schreven, a director at crypto investment firm KR1, said institutional investors are beginning to get more comfortable with investing in bitcoin.

“Bitcoin’s been around long enough now where people are more familiar with it. Yep, it swings wildly, but they might know other people who have bitcoin, and say to themselves, ‘Hey, they’ve done pretty well this year.’ It’s always down to fear of missing out.”

It seems likely that 2020 will welcome ever-more institutional investors to bitcoin. For many, including analysts Messari, it’s bitcoin’s role as a digital store of value that will be key as the market continues to mature.

For ordinary investors, this is good news. Increasing institutional demand will continue to increase bitcoin prices long-term. And with supply fixed at 21 million BTC, there will come a day in the not too distant future where there is no new bitcoin left to mine, which means buying bitcoin will be difficult..

What Does This Mean For Bitcoin Investors and Speculators?

Disregarding the ups and downs of daily bitcoin trading, bitcoin itself remains an attractive prospect, particularly for individual investors.

You don’t have to be a risk-averse bank or pension fund to gain from bitcoin. While there are undeniable risks in investing in what is, compared to other asset classes, a volatile market, there is still room for bitcoin to grow in both the medium and long-term.

If you’re looking for a punt, bitcoin has a proven track record of growth. As recently as 2017, you could buy 1 BTC for $806, around 10% of its value today.

With scope for a rally over the closing quarter of 2019, and markets continuing to mature as institutional investors slowly come round to the idea of backing bitcoin, there are clear arguments to get involved sooner rather than later.



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