Cryptocurrency is the Best Asset Class in Human History (Here's Proof)

Over the last few years, crypto has been cemented as one of the biggest underdog stories of our times. 

Against all odds, it has become the best performing asset class. 

But that doesn’t mean that you should sell all your stocks and line your pockets with crypto. After all, both traditional assets and digital assets have their own risks and rewards worth considering.

While this article does not provide financial advice, let’s take a look at what those risks and rewards actually are. 

Does Bitcoin Have a Higher ROI Than Traditional Assets?

Back in 2014, the price of 1 BTC was hovering around $300 USD. Due to the bear market at the time, this was far from being the best year for early Bitcoin adopters. 

Just 10 years later, in 2024, BTC’s price exceeded $60,000 USD. In other words, BTC had an ROI (return on investment) of around 20,000%.

But what about traditional investment assets?

Well, their results are much more humble:

• The ROI for gold over the same period slightly exceeds 200%. 
• The S&P 500, in turn, had an ROI of around 260%.

Further, according to CaseBitcoin, the broader picture shows Bitcoin’s ROI consistently outperforming the returns offered by gold and the S&P 500.

Crypto vs. TradFi: What Are the Risks?

While the returns speak in favor of Bitcoin and other cryptocurrencies, it’s important to note that digital assets have often proved to be quite risky. 

In fact, even some large and reputable projects have failed.

But TradFi isn’t without its risks either.

As it turns out, there are many risks in both sectors that investors need to be cautious about.

Scams and fraud

Throughout its comparatively short history, the cryptocurrency industry has witnessed a lot of exit scams, Ponzi schemes, and other fraudulent events.

During the early years, this was spurred on by the landscape’s overall lack of regulation. 

But over time, more and more countries have released clear regulatory guidelines, helping to protect investors. 

Still, scams are a prevalent threat in the crypto landscape and users need to do their due diligence when deciding which projects to interact with.

But how do traditional investments compare?

While the financial sector is home to significant regulation, cunning scammers have always found workarounds. 

Enron, Theranos, the Wells Fargo cross-selling scandal, and Bernie Madoff are just a few high-profile cases to hit the TradFi sector that are still on everyone’s lips. 

Volatility

Cryptocurrencies are well known for their high volatility. In fact, it’s this volatility that has allowed people to claim significant rewards on their investments in the first place.

There’s no denying, then, that BTC’s price has been pretty unstable. 

For example, in 2017, the price of BTC spiked from $1,000 to $20,000 USD per coin throughout the course of the year. After that, it plummeted down to $8,000 in a little over a month.

But some TradFi investments–especially those that had the potential for high rewards–have similar stories to tell. A few examples include:

• GameStop. In early 2021, driven by a short squeeze initiated by retail investors on the WallStreetBets Reddit community, the price of GME soared from around $10 to over $500 USD within a month.
• Tesla. During the early stages of the pandemic, shares in Tesla surged from around $85 at the beginning of the year to over $700 USD by the year’s end. Since then, its price has fluctuated between this range.
• Tilray. After an IPO that took place in July 2018, the stock prices of this Canadian cannabis company spiked from $17 to $300 per share in the course of a few months. Later, it returned to its initial price.

Security

Crypto has always been a honeypot for hackers. In 2022 alone, a total sum of $3.8 billion USD was stolen as a result of crypto hacks.

In the TradFi sector, strong regulatory frameworks make stealing money much harder. 

This means that, instead of stealing cash directly, personal data has become a key target for attacks on traditional institutions. 

Back in 2017, the Equifax breach impacted 148 million people. 

In 2022, Chinese e-commerce giant Alibaba suffered a breach resulting in the theft of more than 1 billion people’s data.

In 2024 alone, more than 35.9 billion records have been breached across over 9,478 publicly disclosed incidents.

While it may be hard to give a precise estimation of the financial losses associated with these incidents, the consequences of these data breaches are far ranging—especially when they result in identity theft.

Even TradFi is Getting Behind Crypto

Crypto has been called just about every name in the book by some of TradFi’s giants. For example, who can forget when JPMorgan’s CEO Jamie Dimon called Bitcoin “a fraud” with “no hope.”

Fast forward to today, and those same giants have had no choice but to seek their own profits in crypto. In fact, JPMorgan recently reported that it holds around $760,000 USD worth of shares in Bitcoin ETFs.

At the end of the day, framing investing as a battle between traditional assets and crypto is shortsighted; both types of assets are often bought together as part of a diversified portfolio.

But one thing is clear: crypto has significantly outperformed many of the expectations that it was subject to when Bitcoin first arrived back in 2009.