Data shows Bitcoin has outperformed both gold and S&P 500 during the period of 2021, making it the third year in the row that this has happened.
Bitcoin Beats Both Gold And S&P 500 By A Margin In 2021 Returns
As per the latest weekly report from Arcane Research, BTC has managed to beat the stock market for the third straight year as the crypto’s 2021 returns reach 73%.
2021 was a year of high inflation, and a real test for assets that are traditionally considered to be fine inflation hedges.
Here is a chart that shows how Bitcoin, S&P 500, and gold performed during the course of this year:
Performance of the different assets during the year 2021 | Source: The Arcane Research Weekly Update, Week 51
In the above graph, the returns for the various assets can be seen for 2021. Looks like Bitcoin came out on top with the crypto accumulating around 73% in gains.
While S&P 500 was lagging behind at a distance with its profits amounting to 28%. Nonetheless, the asset performed sufficiently well considering the inflationary environment of the year.
Gold, however, is ending the year in the red as holders face losses of about 7%. This is a bit of a surprise given that the asset is a traditional inflation hedge.
The report notes that even though Bitcoin significantly outperformed S&P 500, the crypto had a highly volatile path to getting there.
The coin has been rather a risk-on asset in the year as it has amplified any sizeable movements of the stock market.
Related Reading | A Look Inside The Record-Breaking Year Of Bitcoin And Ethereum Futures
So, the report concludes that if the stock market continues to perform well next year, BTC will also continue to outperform it.
However, if the stock market sees losses in 2022, then Bitcoin will likely underperform.
At the time of writing, Bitcoin’s price floats around $47.5k, down 3% in the last seven days. Over the past month, the crypto has lost 17% in value.
The below chart shows the trend in the price of the coin over the last five days.
BTC's price seems to have plunged down again in the last couple of days | Source: BTCUSD on TradingView
Around a week ago, Bitcoin looked to have finally broken out of consolidation as the crypto revisited $51k. However, any glimmer of hope the the move gave to holders was smashed in the past two days as BTC has now once again plunged down to $47k.
At the moment, it’s unclear when the coin might recover. However, data shows that the year 2021 was an accumulation period for BTC, which may mean that the coin could still be bullish in the long term.
Featured image from Unsplash.com, charts from TradingView.com, Arcane Research