Its growth has far outpaced individual established stocks from the banking sector.
According to Finbold, over the past five years, bitcoin investment returns have averaged 4,214% higher than those of leading bank stocks. For example, cryptocurrency has outperformed Wells Fargo by 7151.86%, compared to Citigroup’s return on bitcoin investment by 4951.47%, Goldman Sachs is in third place with 3101.94%.
Among the listed assets, bitcoin has the highest market capitalization at $813.56 billion (as of September 21). Second place goes to JP Morgan with a market capitalization of $471.17 billion.
Bitcoin has eclipsed decades-old traditional bank stocks, underscoring its potential in investor perception. It is worth noting that bitcoin and bank stocks belong to different asset classes. Banks are commercial companies that control tangible products and services, while bitcoin is a virtual asset.
At the same time, while bitcoin provides a significant return on investment, said banks are better positioned with trillions in assets under management. They also pay dividends based on stock performance, while bitcoin yields are dependent on demand and value growth.
Bitcoin’s yield is largely due to the rise in popularity and value of cryptocurrencies recorded earlier this year. Bitcoin recorded an influx of institutional investors, causing the price to hit an all-time high of $64,800 in mid-April. Despite short-term corrections, the asset has largely retained the gains made.
It is noteworthy that BTC’s growth took place against the background of constant attacks in the press, which for a long time served the cryptocurrency exclusively in a negative way. In addition, bans in some jurisdictions have affected bitcoin’s volatility.
The gains may be a reflection of the asset becoming a serious defense against inflation and a means of savings. Amid the coronavirus pandemic, stocks plummeted, most economies went into recession, and central governments began printing money on a large scale, resulting in investments going into bitcoin and some altcoins.
Noting the rise in the price of bitcoin, some banks have begun launching investment products related to digital currencies. These moves are driven by increased customer demand.