Despite Bitcoin’s value surging in 2021, the asset’s return on investment (ROI) has been outperformed by select stocks from the traditional sector.
According to data compiled by CryptoParrot based on Finbold’s Bitcoin ROI tool, pharmaceuticals firm Moderna (MRNA) outperformed Bitcoin’s ROI by 243.87%. The returns were recorded on a year-to-date basis. The cryptocurrency underperformed the stock by -60.85%.
From the data, the stocks that outperformed Bitcoin also reflect their company’s role in the wake of the coronavirus pandemic. For instance, the pandemic that renewed focus on the technology sector saw companies like semiconductor manufacturer Nvidia (NVDA) outperforming Bitcoin by 57.84%. The digital currency underperformed the stock by -9.18%. Similarly, Google (GOOGL) also outperformed Bitcoin by 57.38%.
The financial sector stocks like Wells Fargo (WFC) also outperformed Bitcoin by 54.61%, while Goldman Sachs (GS) recorded higher returns by 46.98% compared to the digital currency.
Bitcoin outperforms leading banks’ stocks in the long term
However, the significance of Bitcoin’s growth was highlighted by our previous report that indicated that the asset’s five-year ROI outperformed five leading banks’ stocks by 4,214% on average as of September 2021.
Bitcoin had higher returns than Wells Fargo (WFC) by 7,151.86%. For Citigroup (C), Bitcoin ROI was higher by 4,951.47%, while Goldman Sachs (GS) ranked third at 3,101.94%.
With the rise in Bitcoin value and the last year’s stock market crash, it could easily be assumed that the asset would outperform most of the stocks. However, Bitcoin has been impacted by high volatility and increased regulatory crackdown in 2021 that have hampered the upward trajectory.
For instance, Bitcoin’s value plunged from mid-2021 when Chinese authorities announced a crackdown on the sector. Last week, the asset’s rise towards a new all-time high was also cut short after the Asian country announced a general ban on cryptocurrency trading.
Stock performance reflect market recovery
In this line, the stocks outperforming Bitcoin indicate that the market is recovering after the 2020 crash at the onset of the pandemic. The market has recovered to hit new highs led by sectors like technology and pharmaceuticals.
Furthermore, the comparison in ROI highlights Bitcoin’s growing role as a mainstream investment product. Notably, the asset has since been compared to gold. However, the stock market remains the general competitor to Bitcoin.
Worth noting is that the two asset classes are now making strides to co-exist together. For instance, Bitcoin is witnessing an increase from institutional investors who had shunned the asset before due to factors like high volatility. Elsewhere, the stock market has historically attracted institutional investors.
With both emerging as portfolio diversifiers, stocks still hold the upper hand, considering they operate in a highly regulated environment.