For generations, stocks have been the default asset class for investors seeking long-term returns. Consider the following: $10,000 invested in the S&P 500 at the start of 1980 would be worth north of $1.7 million today.
Obviously, holding an asset for 45 years isn’t practical for all investors, but the point is stocks have delivered the goods over long holding periods. Yes, there will be periods when equities falter or bonds or alternative assets outperform, but betting against stocks over extended timeframes is a long odds wager that history shows is unlikely to payoff.
But there’s a “but.” Cryptocurrency could have a say in the matter. As highlighted by an August survey by crypto broker Kraken, many market participants believe digital currency is the better bet over the next decade than stocks. Sixty-five percent said as much.
Perhaps that bullish view on digital currency is rooted in bitcoin’s jaw-dropping ascent. The largest cryptocurrency turns 17 years old in January and this month represents the 15th anniversary of its first recorded transaction. That occurred at a price of $0.003. As of this writing, bitcoin trades above $117,000.
Too Much Crypto Confidence?
Investors are increasingly confident in crypto as an asset class. Broadly speaking, that’s not a bad thing, but it is an issue for advisors to monitor.
“Crypto confidence is surging ahead of stocks among those who invest in both categories, with 61% reporting increased confidence in digital assets over the past year, compared to only 53% who gained confidence in the stock market — an 8-percentage-point confidence gap favoring crypto,” notes Kraken.
What’s really interesting, and again this is something for advisors to stay abreast of, is investors’ affinity for crypto as a crisis hedge, as highlighted in the Kraken chart below. Not gold, not bonds, not cash, but digital currency.
“This preference could speak to a broader shift in how these investors view digital assets. For many, the data suggests crypto has evolved into more than a high-risk, high-reward speculation. It’s becoming a long-term store of value, and for many, a crisis hedge,” adds Kraken.
The Big Issue for Advisors to Focus On
It’s 2025, so chances are advisors have more and more clients that are crypto-curious. For various reasons, these are conversations worth having. Let’s say a client expresses views that are in-line with the Kraken and expects crypto to beat stocks over the next decade. At a time when there are nearly 9,500 digital currencies on the market, the client needs to be cautioned that a massive percentage of those digital assets won’t beat much of anything, let alone stocks.
That gets into another point. The Kraken survey reveals that 40% of those polled said that if they had extra funds to invest today, they’d put it into cryptocurrency compared to 32% that said the same of equities. Not necessarily an approach to be critical of, but one that demands deeper exploration. How much crypto does the client already hold? What’s the percentage of their portfolio in stocks? What digital currencies are they thinking about buying?
Those are important questions because investors are increasingly taking long-term views of crypto. Holding bitcoin for five, 10 or more years is one thing. Doing so with a sub-$5 million meme coin is a different ballgame and a potentially ruinous one at that.
“That preference for crypto over stocks doesn’t just apply to short-term trading strategies. When asked about long-term investment planning, many respondents showed similar preferences. Over the next 12 months, 69% of investors plan to increase their crypto allocation (27% significantly, 42% slightly), while only 7% expect to decrease it,” observes Kraken.
