If you look at the bitcoin price today, you must be wondering how Brad Keoun at Coindesk came up with the proposition that BTC is the best performing asset of 2019.
He says, “Investors would be hard-pressed to name a better-performing asset class so far in 2019 than bitcoin.”
Keoun suggests Goldman Sachs also supports it: “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.”
He cites the state of the gold market, for example. It is only up 17% since the beginning of the year. So BTC has performed better than gold. It has also performed better than Standard & Poor’s 500 Index, which delivers 21% this year so far.
Why has bitcoin done so well this year?
Until recently the Wall Street investors turned their noses up at bitcoin, saying it was too new, too volatile and of no interest to them. However, a slowing global economy, trade wars over tariffs and low yields from European and Japanese government bonds, the tide has turned, and those same investors are nowing adding crypto to their portfolios.
Keoun cites the example of Pantera Capital, one of the earliest cryptocurrency funds. It scheduled an event in San Francisco for its existing investors featuring cryptographer and digital currency pioneer Nick Szabo, and found that a number of investors who had never touched the asset class contacted the firm requesting invites. Pantera’s Paul Brodsky said, “There’s a lot of drama around it all, there’s a lot of energy, there’s a lot of press. We’re getting interest from significant institutional investors of all types.”
Furthermore, a report this week for Goldman Sachs ranked information-technology stocks as the best-performing sector year-to-date with a 31 percent return, and it noted how these had out-performed other asset classes like bonds and gold.
Various cryptocurrency supporters characterize bitcoin as Gold 2.0, seeing it as essentially a newer, technologically improved and more portable form of the precious metal, which has for centuries been viewed as a reliable store of value. “Bitcoin is slowly becoming digital gold, but it’s not there yet,” said Qiao Wang, New York-based Messari’s head of product.
Bitcoin is still a highly speculative asset, but the signs are that the big investors are increasingly warming to it. Much still depends on how the market evolves, especially when institutional and national digital currencies are added into the mix. But for the moment, it is a strong bet, at least of you are an institutional investor.