Bitcoin has outperformed almost every asset class in the past year – VanEick
Bitcoin (BTC) has outperformed nearly every asset class over the past 12 months, but a recent downward slide has become “worrisome” for investors, according to a Sept. 19 report by asset manager VanEck.
Spot BTC price has increased by 124% since September 2023, and BTC has gained relative share among cryptocurrencies, the report said. The market capitalization of Bitcoin – as of September 20 is approximately 1.25 trillion dollars – includes 56% of the total crypto, an increase of 15% from a year ago, VanEck said.
Van Eyck expects Bitcoin's “long-term bull market” to continue in the future, adding that “the adoption of Bitcoin as an investment vehicle is not the same force today as it is in 2023.”
Source: VanEck
Related: More bets on Bitcoin miners making money on AI
Previously, BTC adoption was a largely retail-driven phenomenon, accelerated in 2023 by “Texts,” which VanEick describes as “a viral innovation that allows users to store media files directly on the Bitcoin blockchain.”
In the year Cryptocurrencies will decline in popularity by 2024, contributing to a 52% year-over-year decline in transaction fees on the Bitcoin network, according to the report.
According to Van Eyck, Bitcoin's price appreciation is best explained by its growing adoption as a currency: a vehicle for storing and transferring value.
In January, US regulators allowed the listing of spot BTC exchange-traded funds (ETFs), which currently hold roughly $55 billion in net assets, according to data from fund researcher Morningstar.
Bitcoin often outperforms following halvings. Source: VanEck
Since then, wealth advisors have adopted the BTC ETF “faster than any new ETF in history,” said Matt Hogan, chief investment officer of asset manager Bitwise, in an article posted on the X platform on September 9.
“Bitcoin's long-term growth is driven by powerful and enduring mega-features: increasingly decentralized, censorship-resistant networks, growing institutional adoption. […] and increasing sovereign participation in mining and cross-border trade,” according to the report, written by Matthew Siegel, head of digital assets research at VanEck.
The biggest losers over the past 12 months were Bitcoin miners, who had a “terrible year” in 2024, according to the report. The Bitcoin network's April “halving” is largely to blame. Every four years, the number of BTC produced per block is halved. The April event reduced mining rewards from 6.25 BTC to 3.125 BTC per block.
That weighed in on the basics of BTC miners. “Bitcoin Hashprice, a measure of profitability in the industry, which measures revenue generated for every one trillion cryptographic hash calculations performed per second, is down 97% year-over-year,” VanEck said.
Magazine: Where Solana's Critics Get Right…and Get It Wrong
