Bloomberg Intelligence says that, in the decade following 2020, bitcoin and cryptocurrencies will continue to outperform commodities, Nasdaq-related stocks and US Treasuries.
In a tweet posted on Monday, Bloomberg shows that the Bloomberg Galaxy Crypto Index (BGCI), a weighted index that includes bitcoin and five other cryptocurrencies, has performed seven times higher than the aforementioned traditional assets over the past two years.
The graph is very clear
This remarkable bitcoin advantage (find out how buy Bitcoins) and other cryptocurrencies as an investment tool comes at a time when the BGCI index has dropped 71% from its all-time high of November 2021.
The BGCI is made up of the following cryptocurrencies: bitcoin (30%), Ethereum (ETH, 30%), XRP (XRP, 18,58%), bitcoin cash (BCH, 9,34%), litecoin (LTC, 6,63 %) and EOS (EOS, 5,45%).
The chart published by Bloomberg shows the BGCI (white) versus the return of the Bloomberg Commodity Index (light blue), the Nasdaq 100 Index (yellow) and the Bloomberg US Treasury Bond Return Index.
The commodities index includes, among others, energy (30,43%), cereals (22,44%), industrial metals (17,53%) and precious metals (15,62%). The Bloomberg Nasdaq Composite Index, on the other hand, predicts a change in the weighting of the Nasdaq 100 stocks, with technology stocks having a weighting factor of 51%, consumer services by 16%, healthcare by 7,7% and stocks financial by 7,4%.
All variables are placed in the same starting point, in early 2020, so that relative growth can be compared. The superiority of cryptocurrency returns can be seen in the last 29 months, with the exception of a short period between March and May 2020, when the Covid-19 pandemic was declared.
The highest peaks in cryptocurrency yields are seen in April and November 2021, with the BGCI showing up to 1.300-fold increases since January 2020, XNUMX.
The price of BTC shows a growing correlation with traditional assets
When looking at traditional assets, commodities grew 59 times over the period, while the 100 companies grouped in the Nasdaq index recorded a combined 42 times growth. By contrast, the Bloomberg US Treasury Index is the only one to record losses equal to ten times its early 2020 value.
Although the current bearish season began in November 2021, that year ended with bitcoin's yield of 60%, double that of traditional assets.
This Bloomberg chart compares bitcoin's yield performance to that of a broad group of sectors such as energy, bonds and the S&P 500. It also shows that bitcoin outperforms most conventional assets as an investment.
Since the beginning of last year, the price of bitcoin has shown increasing correlation with traditional assets, as we have reported here. Recently, the correlation of the price of bitcoin with the Nasdaq index has increased. While with the S&P 500 index bitcoin shows a correlation of 0,52, with the Nasdaq this coupling rises to 0,82. This implies that bitcoin is more sensitive to changes in the Nasdaq index.
As part of its downtrend, bitcoin has stabilized at around $ 29.000 in recent days, following a rebound in purchases. At the time of writing, the BTC price is US $ 29.738.