Bitcoin Outperforms Every Asset this Decade, Will 2020s Tell the Same Story?

The Bitcoin network was launched on January 3, 2009. On January 1, 2010, it had existed for a little under a year. At that time, Bitcoin didn’t have a monetary value since no trading venues existed and there hadn’t been any real purchases with the digital asset to define its price.

Validating Bitcoin

This changed in 2010. The first-ever Bitcoin exchange went live in March of that year. Then, in May, Laszlo Hanyecz bought the now-famous Bitcoin pizzas for 10,000 BTC – making history and proving BTC as a reliable means of payment. Since then, the Bitcoin price has largely trended upwards. Costing just fractions of a cent in 2010, the price experienced a series of prolonged bull markets, punctuated by bearish selloffs that took it to a high of almost $20,000 in 2017. It has since both plunged and regained value to trade above $7,000 at the time of writing. This, according to Bank of America Securities researchers, cited by CNN Business, makes it easily the best-performing asset of the decade. According to 99Bitcoins’s extended price chart, which starts in mid-2010, Bitcoin rose above a dollar in February 2011. This would kick off its first parabolic run in price that saw the price hit almost $30 by June of the same year. Similar waves of speculative mania would occur in both 2013 and 2017 too. For comparison, the S&P 500 returned around 185 percent and Netflix, the best performing stock of the decade, returned 3,726 percent. These figures come courtesy of CNBC. Of course, without a time machine, the news that Bitcoin outperformed every other investment over the last 10 years is rather irrelevant. The real question for investors is how it will fare between now and December 2029. It’s impossible to say if Bitcoin will repeat its stellar performance going forward but many of the cryptocurrency’s loudest proponents are looking towards a bright future for the asset. Controversial computer scientist and presidential candidate John McAfee posits that Bitcoin will be worth $1 million per coin just next year.

A Big Price Jump

Meanwhile, more measured takes, like that reported by BeInCrypto recently, see Bitcoin rising to above $55,000 following the next halving. Plan B (@100trillionUSD) argues that the restriction of Bitcoin’s supply will see the price continue to leap up about every four years. Some time after the 2024 halving, the analyst claims that the price will exceed $1 million. Following the 2028 halving, a colossal price of between $5 million and $10 million is forecast using the methodology.

Some people panicking about this -17% week.

It's just normal #bitcoin behavior. Note we are still up 2x YTD. And yes, S2F model is just fine, nothing out of the ordinary. https://t.co/eTL0ITnn27 pic.twitter.com/iPAkYGAA4d

— PlanB (@100trillionUSD) November 22, 2019

Of course, this model depends on there being a consistent demand for Bitcoin over the next 10 years. Although demand has been growing over the last decade (spurred by capital controls, hyper-inflationary economies, and pure speculation), the same may not always be true. Bitcoin still represents a huge gamble. Global regulators could come down hard on the digital currency, some technological advance could render the protocol obsolete, or some fatal flaw in the network might be discovered that cannot be repaired without significant damage to the asset’s value proposition. Finally, central bankers may opt to entirely overhaul their tried and tested business model and, in doing so, significantly reduce Bitcoin’s appeal. Of course, given the consistent dropping of interest rates in recent years and the many parts of the world suffering rampant inflation, we’re not holding our breath on that last one.