VanEck Reports Bitcoin Outpaced Almost Every Asset Class Over the Last Year

Bitcoin has outperformed nearly all asset classes over the past year, though recent market dips have left some investors uneasy, according to a report from asset manager VanEck on September 19.

As of September 2023, Bitcoin’s spot prices have surged by around 124%, with Bitcoin also gaining dominance among cryptocurrencies. According to VanEck, Bitcoin’s market cap has reached approximately $1.25 trillion as of September 20, representing 56% of the entire crypto market—a 15% increase from the previous year.

VanEck remains optimistic about Bitcoin’s “long-term bull market,” suggesting its future growth is likely to persist. They noted that Bitcoin’s role as an investment tool has evolved since 2023.

Previously, Bitcoin’s adoption was driven mainly by retail investors, spurred in part by a trend known as “inscriptions,” a method that allowed users to embed media files directly on the Bitcoin blockchain, which gained popularity in 2023.

However, as inscriptions faded in 2024, Bitcoin network transaction fees saw a significant 52% decline compared to the previous year. VanEck pointed out that the price gains seen this year are better explained by Bitcoin’s expanding use as a store of value and medium for transferring wealth.

In January, U.S. regulators approved the listing of spot Bitcoin exchange-traded funds (ETFs), which have since accumulated around $55 billion in net assets, according to data from Morningstar. Wealth managers have embraced Bitcoin ETFs at an unprecedented rate, marking one of the fastest ETF adoptions in history, according to Matt Hougan, Chief Investment Officer of Bitwise.

VanEck’s report, authored by Matthew Sigel, Head of Digital Assets Research, identified key drivers for Bitcoin’s growth, including the increasing demand for decentralized networks, expanding institutional interest, and sovereign involvement in mining and international trade.

Despite Bitcoin’s strong performance, the report also highlighted the struggles faced by Bitcoin miners over the past year. A major factor was the Bitcoin halving event in April, which reduced mining rewards from 6.25 BTC to 3.125 BTC per block. This has significantly impacted miners’ profitability, with the Bitcoin Hashprice—an indicator of mining revenue—dropping by 97% year-over-year, according to VanEck.

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