Bitcoin's performance beats the S&P 500, is it the right time to buy Bitcoin?

Bittime - The year 2024 has been a year for Bitcoin, with growth reaching 111%. Meanwhile, one of the safest indices, the S&P 500, showed only 24% growth in the same year.

With this stark difference, many investors are starting to consider whether now is the right time to buy Bitcoin. However, there are varying opinions on the risks and potential returns of this investment.

The S&P 500 is a stock market index that tracks the top 500 companies in the US, including giants like Nvidia, Apple, and Microsoft. The index is known as a safe investment because the companies in it have stable performance.

On the other hand, Bitcoin has experienced extreme fluctuations, with the highest growth reaching 1,336% in 2017 and the biggest drop of 73% in 2018. Bitcoin's annualized total return from 2013 to 2023 stands at 74.1%, much higher compared to the 13.3% of the S&P 500.

Also read: Investors are Eyeing Bitcoin for Long-Term Investment, Here's Why!

Performance Comparison: Bitcoin vs S&P 500

When comparing Bitcoin to the S&P 500, it is clear that Bitcoin offers higher growth potential, but with greater risk. Bitcoin tends to fluctuate more sharply, with significant spikes and drops.

If you invested in Bitcoin in December 2017, you may have to wait more than two years to get your investment back. BlackRock recommends that investors only allocate up to 2% of their portfolio to Bitcoin as a safety measure.

However, some investors argue that Bitcoin could be a safer investment than the S&P 500, especially in the face of inflation. 

History shows that in the 1970s, the S&P 500 could not keep up with inflation, whereas Bitcoin has the potential to provide better returns in the long run.

With a shorter period of negative annual returns, Bitcoin can be an attractive option for those looking to hedge their investments.

Pros and Cons of Bitcoin

One of the advantages of Bitcoin is its ability to provide higher returns in a short period of time. Research shows that Bitcoin has a nearly 40% higher probability of generating daily returns than the S&P 500.

However, the risks associated with Bitcoin's price volatility must also be taken into account. In recent years, Bitcoin has been considered “dead” many times, only to bounce back and reach new highs.

On the other hand, the S&P 500 offers stability and consistency in beating inflation. While some companies in this index may underperform, overall, the S&P 500 has proven to be a safe investment in the long run.

However, for investors who are willing to take risks, Bitcoin can be an interesting testing ground in their portfolio.

Also read: Bitcoin Miner Projected to Skyrocket in 2025, AI Hosting is the Key to Success

Is Now the Right Time to Buy Bitcoin?

With Bitcoin's impressive performance and high growth potential, many are wondering if now is the right time to buy Bitcoin.

While there are risks associated with this investment, the potential for higher returns may appeal to many investors. Bitcoin can serve as a complement in a portfolio protected by more stable investments such as the S&P 500.

Ultimately, the decision to buy Bitcoin should be based on each individual's risk tolerance and investment goals. By understanding the pros and cons of these two types of investments, investors can make a more informed and strategic decision.

FAQ

Why will Bitcoin perform better than the S&P 500 in 2024?

In 2024, Bitcoin experienced 111% growth, while the S&P 500 grew by only 24%. This difference shows the higher growth potential of Bitcoin, albeit with greater risk.

Is now the right time to buy Bitcoin?

The decision to buy Bitcoin depends on an individual's risk tolerance and investment goals. While Bitcoin offers high potential returns, its volatility should also be taken into account. Investors are advised to do their research and consider an appropriate allocation in their portfolio.

What are the pros and cons of investing in Bitcoin?

The pros of investing in Bitcoin include the potential for high returns and the ability to hedge against inflation. However, the main drawback is the significant price volatility, which can lead to large losses in a short period of time.

How to Buy Crypto on Bittime

Want to trade sell buy Bitcoins and crypto investment easily? Bittime is here to help! As an Indonesian crypto exchange officially registered with Bappebti, Bittime ensures every transaction is safe and fast.

Start with registration and identity verification, then make a minimum deposit of IDR 10,000. After that, you can immediately buy your favorite digital assets!

Check the exchange rate BTC to IDR, ETH to IDR, SOL to IDR and other crypto assets to find out today's crypto market trends in real-time on Bittime.

Also, visit the Bittime Blog for interesting updates and educational information about the crypto world. Find reliable articles about Web3, blockchain technology, and digital asset investment tips designed to enrich your crypto knowledge.

Reference

crypto.news, Once again, Bitcoin beats the S&P 500 in yearly growth. Is it time to trade the index for crypto?, accessed on January 7, 2025.

Author: AWW