Shapeshift CEO Erik Voorhees, has suggested that Bitcoin should form at least 1% of every investment portfolio. Voorhees, stated that Bitcoin has already proven itself over the last 12 years and that every investor should consider including it in their portfolio to boost their earnings.
Voorhees suggestions are not without basis as Bitcoin has been the best performing asset for more than a decade now. In fact, the cryptocurrency appreciation in value supersedes all other stocks and commodities usually traded on the conventional financial markets. Its gains have surpassed the entire mainstream market all through the 2010s and is expected to remain on an upward trajectory in the foreseeable future. Putting this into consideration, it is clear that Voorhees has a valid opinion.
How many years does Bitcoin need to be the best performing asset in the world before prudence suggests a 1% portfolio allocation? 10 of the last 12 years Bitcoin has beat every other thing.
— Erik Voorhees (@ErikVoorhees) February 12, 2020
A review of market data shows the enormous difference between Bitcoin and other asset classes including stocks, securities and commodities. Even the best performing assets do not come close to matching Bitcoin’s gains over the past decade. For context, Netflix, the best performing asset during this period, has gained an eye watering 4,177% 10 years to date. Other top performers over the same period were Amazon, Apple, and Microsoft gaining 1,787%, 966%, and 556% respectively . These figures seems impressive but are nothing compared to Bitcoin which has gained an astronomical 8.9 million percent since 2010 to date.
The cryptocurrency also outperformed gold by miles with the asset gaining only a partly 38% over the last 10 years. For context, an investment in one ounce of gold at $1,113 in 2010 would now be worth around $1,542, a fairly decent return in the mainstream financial market terms. On the other hand, a $1 investment in bitcoin in 2010 would now be worth $90,000. Clearly, there is only one winner here.
Surprisingly, despite having demonstrable extraordinary returns, mainstream investors remain suspicious of Bitcoin ignoring it in most portfolios. The investors continue to perceive Bitcoin as a high risk asset with no place in their permanent portfolios. Suffice to say, Bitcoin’s reputation as a highly volatile asset precedes it at every turn explaining why investors continue to shun it.
What these negative perceptions about Bitcoin fail to capture is the digital asset’s resilience demonstrated by the upward trajectory that it has maintained to date with no signs of slowing down. The cryptocurrency’s prospect also remain largely positive with forecasts pointing to a continuation of its upward momentum. The upcoming halving is also expected to further boost its pricing and potentially reach new highest price.
If this will be convincing enough for mainstream investors to include it in their portfolios, no one knows. Certainly, the 1% suggestion seems reasonable enough.
Image courtesy of Pixabay
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