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Bitcoin And Ethereum Both Outperform Gold In 2021

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Bitcoin and Ethereum both surpassed their previous all-time highs, rising 71.8 percent and 456 percent, respectively, in 2021.

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Bitcoin (BTC), the most valuable cryptocurrency by market capitalization, surpassed its previous all-time high in 2021, reaching well over $69 000 on November 10th, an increase of 71.8 percent year-over-year. Bitcoin has increased 56.6 percent since its local low of just under $30 000 on July 21st. If bitcoin remains at this level until the end of the year, 2021 will be the cryptocurrency’s fourth-worst year since 2011.

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Despite a poor year for bitcoin, Ethereum (ETH), the second-largest cryptocurrency by market capitalization, soared 456 percent in 2021. Ethereum grew steadily throughout the year, achieving its first all-time high of $4182 on May 12th and a second all-time high of $4878 on November 10th. This puts 2021 as Ethereum’s second-best year in its five-year history.

In 2021, both major cryptocurrencies outpaced the stock market and gold. The Nasdaq and S&P 500 indices both posted positive annual returns of 26.54 percent and 25.82 percent during the same time period.

Interestingly, bitcoin beat the market performance of the physical yellow metal in 2021, which had a negative return on investment of 5.26 percent at the time of writing, as proponents often describe the currency as digital gold.

Since mid-2020, gold’s market performance has been on the slide, falling from just above $2070 per oz in mid-July 2020 to $1812 per oz, a 12.5 percent drop from its peak. Gold has fared well over the last five years, with a gain of 59.7 percent. The market value of gold increased by 12.5 percent over a ten-year period.

On December 23rd, 2016, the price of bitcoin was $891. The market price of bitcoin is $50 852 as of this writing, representing a 57x or 57 000 percent rise.