Bitcoin’s 124% 10-year annualised return tops S&P 500

Over the past decade, Bitcoin has seen remarkable growth, outpacing traditional assets like stocks and gold by a significant margin.

According to Stocklytics.com, Bitcoin stands tall, boasting an astonishing 124% annualised return, far surpassing traditional assets.

Stocklytics financial analyst Edith Reads said, “Bitcoin’s utility as a hedge against inflation and economic uncertainty has become increasingly apparent in recent years.

“With central banks around the world engaging in unprecedented monetary stimulus measures, concerns about currency debasement and inflation have driven investors to seek refuge in alternative assets like Bitcoin.”

By comparison, the S&P 500, a benchmark index comprising the 500 largest publicly traded companies in the United States, posted an annualized return of approximately 13% over the same period.

So far in 2024 (YTD), the Gold spot price index has returned an average of 1.36%.

Digital gold

Positive sentiments have been rising in anticipation of the halving event in 2024, which occurred on April 20th. Halving is the process where the reward for mining a Bitcoin is halved, which means that miners are awarded 50% lower rewards for verifying transactions. In turn, this reduces the rate of money supply growth, which may cause prices to rise if demand remains elevated.

A decentralized network of validators verifies all Bitcoin transactions in a process called mining. They are currently paid 3.125 BTC when they are the first to use complex math to add a group of transactions to the Bitcoin blockchain as part of its proof-of-work mechanism.

At Bitcoin’s current price, 3.125 BTC is worth about $200,000. That’s a decent incentive for miners to keep adding blocks to keep Bitcoin transactions running smoothly.

Those blocks of transactions are added roughly every 10 minutes. Bitcoin code dictates that the reward for miners is reduced by half after every 210,000 blocks are created. That happens roughly every four years in periods often accompanied by heightened Bitcoin price volatility.

Post Bitcoin halving

As Bitcoin enters its post-halving phase, several key indicators offer insights into its potential direction. Recent data from a Bitfinex report indicates a notable uptick in BTC outflows from centralized exchanges, reaching levels not seen since January 2023.

This surge suggests a shift in investor behaviour towards accumulation, driven by the anticipation of price appreciation following the halving event.

Moreover, analysis of Bitcoin supply movements reveals a transitional phase, marked by a decline in activity among long-term holders (LTHs) and increased transactions involving newer investors. This decrease suggests that LTHs may be capitalizing on profits.

On the other hand, the influx of newcomers is reflected in the Market Value to Realized Value (MVRV) ratio for short-term holders (STHs), which remains below historical peak thresholds, indicating room for further growth.

Amid wide-ranging sentiments, analysts are buzzing with predictions and observations about BTC’s next moves. Some are eyeing ambitious targets, while others are cautious.

An analyst has consistently emphasized a key target range for Bitcoin: $80,000 to $85,000. However, they also acknowledge that Bitcoin’s potential to surge even further cannot be discounted.