A Turbulent Year for Crypto and TradFi
MicroStrategy’s Meteoric Rise
Despite a tumultuous month, MicroStrategy (MSTR) remains one of the top-performing crypto-linked assets in traditional finance (TradFi). With a staggering 342% return in 2024, the software developer turned bitcoin accumulator has outpaced its peers. This remarkable growth comes on the heels of a 600% gain since the start of the year, making it the biggest return among high-profile crypto-linked assets.
Global Events Shake Markets
The past year has been marked by geopolitical and technological developments that have rattled financial markets. Ongoing conflicts in eastern Europe and the Middle East, global elections, and the unwinding of the yen carry trade in August have all contributed to market volatility. Moreover, the rapid growth of artificial intelligence (AI) has added to the uncertainty.
Tech Stocks Shine
Nvidia (NVDA), a chipmaker whose production of integrated circuits is crucial for AI applications, has seen a 185% return, making it the best performer among the so-called magnificent seven tech stocks. Meta Platforms (META) follows closely, with a 71% return. Meanwhile, bitcoin itself has risen 100% over the past year, driven by the January approval of spot exchange-traded funds (ETFs) in the U.S.
Bitcoin Outperforms Peers
Bitcoin has outpaced its competitors, including ether (ETH), which rose 42%, and Solana (SOL), which gained 79%. The iShares Bitcoin Trust (IBIT) has also returned over 100%, becoming the fastest ETF in history to hit $50 billion in assets.
Mixed Bag for Mining Companies
While bitcoin mining companies have generally disappointed, individual companies like Bitdeer (BTDR) and WULF (WULF) have seen significant gains, adding 151% and 131%, respectively. Despite this, the broader equities market has trailed behind, with the tech-heavy Nasdaq 100 Index (NDX) adding 28% and the S&P 500 Index (SPX) rising 25%.
Gold and Treasury Yields Soar
Gold has topped the equity gauge in three of the past five years, with a 27% increase in 2024. Concerns about U.S. inflation and the country’s budget deficit have contributed to a massive rise in U.S. treasury yields, which have added 15% to 4.5% over the course of the year.
Dollar Strength and Oil Volatility
The dollar has shown its strength, with the DXY Index (DXY) rising to the highest since September 2022. Meanwhile, West Texas Intermediate (USOIL), the benchmark oil price in the U.S., has ended the year little changed, up less than 1% to around $71 a barrel, despite a bumpy ride.
Looking Ahead to 2025
As we enter the new year, investors will be keeping a close eye on the debt ceiling discussion, the policies of President-elect Donald Trump, and whether the U.S. can continue its impressive growth story.
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