Historically speaking, few, if any, asset classes have outperformed the stock market over the long term. Including dividend reinvestment and inflation, the stock market has returned an average of 7% annually. It has run circles around other assets like gold, bonds, oil, and even home prices.
But 2017 has been a year like no other. It has introduced the world, loud and clear, to cryptocurrencies. When the year began, the aggregate market cap of all digital currencies combined equaled just $17.7 billion. Earlier this month, the aggregate value of these cryptocurrencies soared past $225 billion. This represents almost a 1,200% return in less than 11 months, which the broad-based S&P 500 has taken decades to accomplish.
Leading the charge is the most popular virtual currency, bitcoin. The original cryptocurrency began the year under $970 per coin, and Nov. 16 it topped the $8,000 mark. That's a return of more than 700% year to date, pushing bitcoin's market cap to an astonishing $133 billion. For added context, bitcoin's market cap is now larger than several well-known companies in the Dow Jones Industrial Average.
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