Will Bitcoin’s 121% surge outshine S&P 500 in 2025? Gauging...
- Bitcoin’s 121% surge year-to-date has many investors betting on an even bigger cycle.
- Meanwhile, the top 10 stocks in the S&P 500 have accounted for a staggering 59% of the index’s gains since 2022.
2024 was a year of highs and lows. Bitcoin [BTC] soared by 121%, securing its place as the seventh-largest asset with a market cap over $2 trillion.
Meanwhile, the U.S. stock market is now worth a whopping $63.8 trillion, near an all-time high.
But the story wasn’t all about gains. The S&P 500 pulled off back-to-back 20%+ gains for the first time since 1998, while Bitcoin faced a 22% dip from the previous year.
As we step into 2025, diversification is more important than ever. Investors are eyeing high returns while keeping a close watch on macro trends.
So, in the midst of all this, which asset should dominate your portfolio in the year ahead?
Weighing the risks and rewards of Bitcoin vs. stocks
Just a week into 2025, and the crypto market has already shifted into the greed phase. Clearly, Bitcoin’s 121% surge year-to-date has investors all-in, betting on an even bigger cycle ahead.
As a result, BTC is climbing steadily, with consecutive green candlesticks and daily gains of 1-2%. So, from a psychological standpoint, it’s clear that investors are fully invested in the digital asset.
But here’s the catch: Even with a staggering $500 billion in cumulative daily trading volume of the U.S. Bitcoin ETFs last year, and $37 billion in net inflows, Bitcoin’s double-digit dip from 2023 still raises concerns.
Source: Bloomberg
To add to the uncertainty, BlackRock’s (IBIT) BTC ETF saw a staggering outflow of $333 million on the 2nd of January – its largest sell-off ever.
With the U.S. government facing a massive $7 trillion debt repayment this year, it’s no wonder that investors are exercising caution. If this trend continues, more outflows could shake up the crypto market even further.
Meanwhile, the S&P 500 index has surged 23.8% year-to-date, following a strong 24.2% gain in 2023. And of the top six assets, excluding gold, five are dominated by stocks.
But here’s the kicker: this list is increasingly tech-heavy. In fact, the top 10 stocks in the S&P 500 are now nearly 800 times larger than the average stock in the index.
So, what does that mean for Bitcoin? Even with the dominance of tech giants, Bitcoin is still holding its own. It’s trailing only Alphabet (Google) with a market cap of $2.35 trillion.
And if Bitcoin hits $120K this year, it could even make a jump into the top 5.
A unique advantage tips the scale in Bitcoin’s favor
Despite their impressive performances, both Bitcoin and stocks are still considered “risky” investments – especially when stacked up against more stable options like bonds or gold.
However, there’s one key factor that sets Bitcoin apart, positioning it as a better choice when the market turns tough.
Forget about the flashy YTD returns or the buzz around ETFs and institutional backing. The real advantage lies in Bitcoin’s rising recognition by governments.
While Bitcoin still has a long way to go before matching gold’s $18 trillion market cap, the growing narrative of BTC potentially overtaking gold as the ultimate safe-haven asset in the future is powerful.
With this in mind, BTC could potentially close 2025 with triple-digit returns, making it a compelling investment for you.
Read Bitcoin [BTC] Price Prediction 2025-2026
In contrast, while the S&P 500’s top stocks shine, the broader market might not be as resilient.
Overall, Bitcoin’s rising profile makes it a strong hedge against market risks that other assets like stocks might struggle – especially as market volatility is expected to surge in the coming months.
