Markets have a way of turning short-term relief into long-term optimism. Investors see an asset bounce off its lows and quickly start talking about new highs. Bitcoin’s (BTCUSD) recent recovery is following that script. After briefly falling below $60,000 amid the Iran war and renewed concerns over Federal Reserve policy, the cryptocurrency has clawed its way back above the $62,000 mark. Bulls are once again forecasting six-figure prices.
The problem is that a recovery is not the same thing as a successful investment. When investors zoom out beyond the latest bounce, Bitcoin’s record over the last five years looks far less impressive than many advocates would like to admit.
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Bitcoin’s Lost Half-Decade
Bitcoin reached a peak above $126,000 last year before the October flash crash marked what increasingly appears to be its cycle high. Since then, the trend has been downward, interrupted by periodic rallies that have failed to regain prior highs.
More importantly, Bitcoin has produced essentially no return over the last five years. Where the S&P 500 ($SPX) has returned around 62% since November 2021, BTC has gone exactly nowhere over the same period.
That’s the comparison many crypto enthusiasts prefer to avoid. While traders focus on dramatic short-term price swings, long-term investors care about total returns. By that measure, Bitcoin has badly trailed a simple investment in an S&P 500 index fund.
The headwinds continue to mount. Spot Bitcoin exchange-traded funds (ETFs) have experienced ongoing outflows, stablecoin growth has slowed, and digital asset treasury activity has weakened. Those trends suggest fresh capital entering the crypto ecosystem remains limited.
Strategy Isn’t Sending a Bullish Signal
One of Bitcoin’s biggest corporate supporters has also delivered a reality check. Strategy (MSTR) recently resumed purchasing Bitcoin after pausing acquisitions. More notably, the company did something many investors once considered unthinkable: It sold Bitcoin…
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