Invesco Bitcoin Posts 122 Gain in 2024 Raising StoreofValue Debate

Highlights

• Bitcoin delivered a 122.5% gain in 2024, outperforming every major asset class.
• Over the past decade, Bitcoin achieved an annualised return of 76.6%, the highest among global assets.
• Invesco cautions that Bitcoin’s correlations and volatility have grown.

According to Invesco’s March 2025 report, Bitcoin has outperformed every major asset class in eight of the last ten years. In 2024 alone, the digital asset delivered a 122.5% return, driven by growing adoption through spot Bitcoin exchange-traded funds (ETFs) and optimism around pro-crypto policy shifts in the United States.

The performance brings Bitcoin’s 10-year annualised return to 76.6%, placing it ahead of equities, bonds, and commodities. This consistent outperformance has drawn both bullish advocates who view it as the foundation of a multi-year adoption cycle, and skeptics who warn of bubble-like risks.

Portfolio Diversification and Rising Correlations

Traditionally, Bitcoin has often been considered a portfolio diversifier or “digital gold.” Invesco notes that early performance studies suggested Bitcoin delivered largely uncorrelated returns compared to traditional asset classes. However, this characterisation has changed as the asset class has grown.

Since the pandemic, Bitcoin’s correlation with risk assets has increased, reflecting its sensitivity to broader market factors. Invesco cautions that while Bitcoin’s early history points to low correlations, its relatively small market capitalisation at the time makes such conclusions misleading. With today’s market capitalization surpassing USD 2 trillion, Bitcoin has evolved into a mainstream investment vehicle and behaves more like a risk-on asset.

Volatility and Questions on Store of Value

Despite its growth, Bitcoin’s volatility remains high. The report highlights that from 2014 to 2024, Bitcoin’s monthly annualised volatility averaged 76.3%, compared with 15.2% for U.S. large-cap equities.

Major downturns underline this volatility. Invesco’s data shows one-year drawdowns of over -80% in 2014 and 2018, and -72% in 2022. The report suggests that these repeated sharp declines raise questions about Bitcoin’s ability to serve as a reliable store of value, despite its reputation as a hedge against inflation.

The Regulatory Landscape – Opportunity and Challenge

Invesco also examined the regulatory environment. While Europe has moved forward with the Markets in Crypto Assets (MiCA) legislation, and U.S. policymakers have signaled more favorable treatment, risks remain.

The report underscores that governments retain the power to restrict crypto if it is perceived as a threat to financial stability. This remains a key element of the bear case for Bitcoin, alongside concerns about tax treatment and cross-border compliance complexities.

Bitcoin’s track record of outperformance positions it as one of the most compelling, yet controversial, assets of the last decade. While adoption through ETFs and institutional interest are likely to expand its reach, investors must weigh its volatility, increasing correlations, and regulatory risks.