Investors who have owned stocks in the last year have generally experienced some big gains. In fact, the SPDR S&P 500 (NYSE: SPY) total return over the last 12 months is 74.3%. But there is no question some investments performed better than others along the way.
Bitcoin’s Big Run: As strong as the stock market has been since it bottomed on March 23, 2020, Bitcoin (CRYPTO:BTC) has been much stronger.
After a wild ride that took Bitcoin prices near $20,000 in late 2017, the previous Bitcoin bubble burst in 2018 and the cryptocurrency finished the year down 72.6%. Bitcoin came back to life in 2019, however, finishing the year up 87.2% and priced at around $7,200.
Several factors led to a surge in Bitcoin buying in 2020. First, investors concerned about the potential long-term damage that trillions of dollars in federal stimulus could do to the value of the dollar have flooded into Bitcoin as a potential safe-haven play. Second, younger Americans receiving three rounds of direct stimulus payments have poured a significant chunk of that cash into investments, including Bitcoin.
Mizuho recently estimated the most recent round of $1,400 stimulus payments alone could contribute to roughly $24 billion in Bitcoin buying.
After starting 2020 at around $7,200, Bitcoin prices had reached $10,000 by mid-February.