As we reach the midpoint of 2019, it’s looking increasingly likely that we are once again in the midst of another bullish phase throughout the wider cryptocurrency market, with the price of Bitcoin and several other major crypto assets rising astronomically during the past few months.
Many investors have seen this as a welcome break from the prolonged bear market which started at the beginning of 2018 and saw the majority of major cryptocurrencies lose over 90% of their value since their all-time highs, bringing the total crypto market cap down with it.
While it’s easy to get carried away in the cryptocurrency markets as a blockchain enthusiast, many traders, investors, and long term holders seldom stop to think about how their cryptocurrency gains would compare to those realized from traditional asset classes.
On the other hand, crypto investments are still eyed with caution, or outright shunned, by some traditional investment professionals, with legendary American investor Warren Buffet calling Bitcoin a ‘Delusion’ earlier this year in an interview with CNBC.
However, it seems that many traders who don’t want to risk exposure to cryptocurrency assets may be missing out on serious potential gains, as one prominent investor pointed out this week.
Crypto Vs. Classic Investments
Prominent trader, writer and Twitter personality, Charlie Bilello, who boasts over 110,000 Twitter followers, posted a series of tweets on Tuesday comparing both the returns traders would have gained from traditional assets such as commodities and the S&P 500, with Bitcoin (BTC), and a whole host of other cryptocurrencies since the beginning of 2019.
Bitcoin $BTC: +143%
REITs $VNQ: +22%
Nasdaq 100 $QQQ: +21%
S&P 500 $SPY: +18%
Oil $USO: +16%
Small Caps $IWM: +16%
EAFE $EFA: +12%
Investment Grade $LQD: +10%
High Yield $HYG: +9%
EM $EEM: +8%
Commodities $DBC: +6%
Bonds $AGG: +5%
Gold $GLD: +5%
Cash $BIL: +1%
— Charlie Bilello (@charliebilello) June 19, 2019
Interestingly, those who had invested in gold or bonds would have seen a return of just +5% since the beginning of 2019, -3% lower than even the worst performing major cryptocurrency, Stellar Lumens (XLM), which has yielded +8% since the beginning of the year.
Investing in stock market indices such as the S&P 500 and the Nasdaq 100 would have yielded fairly decent gains of +18% and +21% respectively, and real estate investment trusts, or REITs, would have yielded on average a strong gain of +22%. On the other hand, investing in Oil, which has seen some volatility this year would have seen a gain of +16%.
Comparatively, Ripple (XRP), the third-highest cryptocurrency by market-cap at the time of writing, would have yielded investors +16% since the beginning of the year, whereas the second-highest crypto by market-cap, Ethereum (ETH), yielded a huge +87%, and Monero (XMR) would have netted it’s investors a similarly impressive +98%.
2019 Crypto Returns
Binance Coin: +479%
Bitcoin SV: +141%
Eth Classic: +59%
— Charlie Bilello (@charliebilello) June 19, 2019
However, eight of the major cap cryptos, which Bilello also tweeted about, would have yielded their investor’s triple-figure percentage gains since the start of 2019. The biggest gainers may come as a surprise, however, as it’s not Bitcoin which has led the 2019 rally but instead leading exchange coin Binance coin (BNB).
Investing in Binance coin at the start of this year would have yielded investors a massive +479%, multiplying their initial investment many times over. Likewise, Litecoin, often referred to as digital silver, has far outperformed real precious metals, yielding over +320% for its investors.
Other high gainers for investors who bought and held from the start of 2019 include third-generation cryptocurrency Cardano, which yielded +110%, dApp focused blockchain EOS which gained +150%, and even Bitcoin SV, Craig Wright’s new blockchain offering which was launched after a hard-fork from the Bitcoin Cash protocol in November 2018, would have yielded over +140% so far this year.
Overall, there’s been some seriously strong price gains so far during 2019, which have somewhat balanced out bear market losses and there’s potential to hold this upward momentum during the rest of 2019.
Such gains are almost unheard of in the day-to-day trading of traditional assets or investments, with the only similar gains coming from initial public offerings (IPOs), or more recently, cannabis stocks – which have seen gains of hundreds of percent. For example, Cannabis branding company TransCanna Holdings, gained a huge 586% since the beginning of 2019.
Likewise, the Beyond Meat (BYND) IPO, the plant-based burger company which launched earlier this year, has gained over 600% since it began publicly trading, becoming one of the best stock market performers in recent years, and outperforming even the highest gainers of the top market cap cryptocurrencies.
Conversely, while many of the top 20 market cap cryptocurrencies have risen in some capacity so far during 2019, ride-hailing apps Uber and Lyft, which launched their IPOs earlier this year, are trading around their listing price, performing poorly compared to some of the cryptocurrencies we’ve examined.
Many traders, especially those who are risk averse, may still be slow to enter the crypto markets in 2019. However, from a long term hold perspective, percentage gains realized from crypto portfolios this year would have far exceeded many traditional asset classes and have heavily outperformed supposedly ‘hot’ new IPOs such as Uber and Lyft.
However, there’s plenty of stocks out there which have huge potential upside, Beyond Meat for example and particularly cannabis stocks, and it’s still worth cryptocurrency investors diversifying their risk and exploring other traditional asset classes as part of their portfolios.