In the ever-evolving landscape of financial markets, cryptocurrencies and tech stocks have emerged as formidable contenders for investors’ attention. As the dust settles on a tumultuous five-year period, a pressing question arises: Which performed better, crypto or stocks?
CoinGecko published a study on July 1 examining how these finance titans performed against each other in the last five years.
The rise of the Magnificent Seven
The term “Magnificent Seven” was coined by Bank of America analyst Michael Hartnett in April 2023 to describe seven dominant tech stocks. These stocks include Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), Alphabet (NASDAQ: GOOGL), Meta Platforms (NASDAQ: META), Amazon.com (NASDAQ: AMZN), Nvidia (NASDAQ: NVDA), and Tesla (NASDAQ: TSLA). Together, they have come to represent a significant portion of the United States tech stock market.
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As reported by CoinGecko, these stocks have shown remarkable growth over the past five years. Their combined market capitalization increased from $4.35 trillion in 2019 to a staggering $15.770 trillion by June 2024, representing a 262.5% increase.
Crypto’s meteoric rise
While the Magnificent Seven were flexing their muscles, cryptocurrencies were not sitting idle. Bitcoin (BTC) and Ethereum (ETH), the two largest cryptocurrencies by market cap, demonstrated explosive growth during the same period.
Bitcoin’s market cap surged from $103.98 billion in May 2019 to $1.25 trillion by June 2024, marking a 1,102.2% increase. Meanwhile, Ethereum’s growth was even more impressive, skyrocketing from $18.16 billion to $421 billion, representing a 2,218.3% increase.
Crypto vs. stocks: The battle of the titans
When comparing the performance of crypto against the Magnificent Seven, some interesting patterns emerge. Surprisingly, Nvidia emerged as the top performer among all assets, with a jaw-dropping 2,782.8% increase in market cap over the five-year period.
However, both Bitcoin and Ethereum outperformed the majority of the Magnificent Seven stocks. Ethereum’s growth closely aligned with Nvidia’s, while Bitcoin’s performance was comparable to Tesla’s 1,340.8% increase.
Several key events shaped the trajectory of both crypto and stock markets during this period. For cryptocurrencies, milestones such as PayPal’s integration of crypto in October 2020 provided significant boosts, according to CoinGecko.
Conversely, suppressive events like Elon Musk’s decision to stop accepting Bitcoin for Tesla purchases and the collapse of major crypto entities like Terra and FTX created temporary setbacks.
The Securities and Exchange Commission’s (SEC) approval of Bitcoin ETFs in January 2024 marked a turning point for crypto adoption. This event led to a divergence in growth between Bitcoin and Ethereum, with both experiencing a 50% market cap increase in the following months.
Looking ahead
As we move forward, the battle between crypto and stocks continues to evolve. The impending approval of Ethereum ETFs and ongoing technological advancements in both sectors promise to keep this race exciting.
In conclusion, while some individual stocks like Nvidia outperformed crypto, Bitcoin and Ethereum have proven their mettle against the majority of the Magnificent Seven over the past five years. As always, investors should approach both markets with careful consideration of risk and potential rewards.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
