Crypto market vs. stock market
It might be challenging to compare the performance of stocks and cryptocurrencies. Over the past ten years, the S&P 500 has generated an average annual return of 10.9%, while the Nasdaq has generated an average annual return of 14.4%. The average return for the FTSE 100 was 7.4%. It appears that the winner is obvious when comparing these numbers to Bitcoin (195%) and Ethereum (663%) since its start.
This contrasts apples and oranges, though. We are, after all, contrasting individual crypto assets with far lower market valuations with baskets of corporations. Even then, Amazon (28.5%), Google (19.7%), Tesla (62.9%), and Microsoft (26.4%) don’t even come close to matching the returns of the two main crypto assets. A more accurate comparison would be to compare the returns of some IT stocks to cryptocurrency.
However, stocks have performed better during the past year. Compared to this time last year, the S&P 500 is up 5.4%, while Bitcoin is down more than 30%. On the midterm, it appears that the two classes perform extremely differently. Cryptocurrency has, nevertheless, grown more closely associated with stock market results despite these distinctions. The S&P and Bitcoin have a strong 0.58 90-day correlation, according to recent data from Arcane Research.
