Asset Class Total Returns

Decoding Market Movements and Bitcoin’s Meteoric Rise: A Comprehensive Analysis

If we take a general look at how the market behaves in the long term, we will have the reality of what makes a chart, which has increasing demand versus supply.

To give a great example, the following graph allows us to have a panoramic view of what the US large company stock has made, as total returns, in that long term (chart view, on log scale).

In the following infographic, we have for decades, how the market has risen and also, what has risen the most in general (in the 2010s the crypto world is excluded).

We can observe how as time passed, each decade brought different movements, from different areas, segments, countries, emerging markets, commodities, large technology companies, etc.

There is no memory, nothing from the crypto world in the following infographic.

Bitcoin (BTC):

You still don’t know what bitcoin is?

Unlike traditional currencies, such as the dollar or euro, Bitcoin does not exist in physical form; It is purely digital and is based on a technology called blockchain.

Here are some key aspects of bitcoin:

Decentralized digital currency: bitcoin is not backed by a government or a central entity, such as a central bank. Instead, it operates in a decentralized manner on a network of computers that participate in validating transactions and creating new blocks on the blockchain.

Blockchain: The underlying technology of bitcoin is the blockchain, which is a public, distributed ledger of all bitcoin transactions. Each block contains a set of transactions and, once validated, is added chronologically to the existing chain, forming an immutable record of all bitcoin transactions.

Bitcoin Mining: The Bitcoin network uses a process called mining to validate and record transactions on the blockchain. “Miners” are people or computers that solve complex mathematical problems to confirm and add transactions to the blockchain. In exchange for their work, miners are rewarded with new units of bitcoin and transaction fees.

Limited supply: Unlike traditional currencies, bitcoin has a limited supply. It has been established that there will only be a total of 21 million bitcoins in circulation. This means that no more bitcoins can be created arbitrarily, which can help prevent inflation.

Peer-to-peer transactions: Bitcoin transactions are carried out directly between users, without the need for intermediaries such as banks. This allows transactions to be carried out quickly and relatively anonymously.

Volatility: The price of bitcoin is known for its volatility. It can experience significant fluctuations over short periods of time, which has led to debates about its suitability as an investment and as a medium of exchange.

In the following graph, we can observe in logarithmic terms the gigantic upward movement of bitcoin since its birth (January 3, 2010, listed).


Just taking a look at what happened to asset class total returns in the last decade makes you think about what could happen in the next decade, in which we are already immersed.

The table that I attach below is more than explanatory.

Remember that it is not a purchase recommendation, but rather a general overview of how international markets work, in relation to the main asset classes and their total return.


Jesús Sánchez-Bermejo