Bitcoin recently had its 10th anniversary and the last 10 years have birthed an alternate market of crypto assets. The last 10 years have also triggered polarizing debates about whether cryptocurrency is money or commodities.
On Wall Street, cryptocurrencies still generate mixed reactions. Some people believe that cryptocurrency is the future of money and that the token economy surrounding decentralized applications could potentially coexist with traditional Wall Street assets. In contrast, some people believe that cryptocurrencies are scams or at best, speculative bets for thrill-seeking traders and investors.
This piece compares the 5-year performance of FANG stocks – the grouping of major technology companies known as FANG (Facebook, Amazon, Netflix, and Google)- against the performance of Bitcoin over the same period to determine if Wall Street traders and investors are better off holding stocks or Bitcoin.
Bitcoin Vs FANG
The U.S. stock market has been enjoying bullish tailwinds in the last few years after the emergence of Donald Trump even though there are decent arguments for and against the correlations or causality of Washington and Wall Street. However, Bitcoin and the general cryptocurrency market hasn’t enjoyed any noticeable support from Washington in the same period. Nonetheless, the performance of Bitcoin relative to FANG stocks tells an interesting story between the emerging asset class and traditional Wall Street equities.
While the S&P 500 is traditionally considered the optimal representation of the U.S. stock market, FAANG stocks typically set the momentum and the direction of the market. In the last 5 years, FANG stocks have outperformed the S&P 500 as seen in the chart below. Facebook Inc (NASDAQ: FB). was up 160.1%, Amazon.com, Inc. (NASDAQ: AMZN) was up 454%, Netflix Inc. (NASDAQ: NFLX) was up 434%, and (Google) Alphabet Inc. (NASDAQ: GOOGL) was up 140.9%, In contrast, the S&P 500 (GSPC) only posted 51.85% gains in the same period.
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