Investing in Bitcoin and Ether, the top two cryptocurrencies, has the potential to significantly enhance the performance of traditional investment portfolios. Philippe Meyer, the head of digital and blockchain solutions at BBVA, stated that including Bitcoin (BTC) and Ether (ETH) in investor portfolios could lead to a substantial improvement in return on investment (ROI).
Meyer noted during a panel at the Web3 Corporate Innovation Day that BBVA had observed a positive impact on investment portfolios by introducing a small percentage of digital assets like Bitcoin and Ether. He suggested that allocating 3% to 5% of a portfolio to cryptocurrencies could greatly increase investor returns.
These comments come at a time when the crypto market is experiencing a bull cycle, with Bitcoin’s price surging over 146% in the past year, surpassing the $65,383 mark, according to data from CoinMarketCap.
In 2024, Bitcoin has significantly outperformed the S&P 500, a stock market index tracking the performance of the 500 largest publicly listed companies. Year-to-date, Bitcoin’s price has increased by over 47%, while the S&P 500 has only risen by 15%, as shown by TradingView data. This means that Bitcoin has outperformed the index by more than threefold.
Looking at the yearly timeframe, Bitcoin’s price has surged by 147%, while the S&P 500 has only seen a 24% increase, resulting in Bitcoin outperforming the index by over sixfold. However, in the short term, Bitcoin has experienced a slight decline of 2.3% on the monthly chart, while the S&P 500 has risen by 2.8% during the same period.
Bitcoin’s price correction is partly attributed to reduced inflows from U.S. spot Bitcoin exchange-traded funds (ETFs). Last week, these ETFs saw three days of negative outflows after 20 consecutive days of net positive inflows, with over $145 million worth of outflows reported on June 17, according to data from Farside Investors.
Jag Kooner, the head of derivatives at Bitfinex, explained that the primary reason behind the outflows is ETF investors lacking conviction and selling below their initial cost basis. The market continues to be dynamic, with various factors influencing the performance of Bitcoin and other cryptocurrencies.