2024 Stock Surge: Bitcoin and Nvidia Lead the Charge
2024 is shaping up to be a standout year for the stock market, with Bitcoin and Nvidia emerging as two key players in this growth.
Bitcoin (CRYPTO: BTC) and Nvidia (NASDAQ: NVDA) have experienced remarkable increases this year, outpacing almost all large-cap investments. The following chart illustrates their performance against the S&P 500 (SNPINDEX: ^GSPC) during this year’s bull market.
^SPX data by YCharts
As shown, Nvidia has outperformed Bitcoin, with both investments more than doubling in value this year. Although they operate in different sectors, they are vying for investor interest.
Over the last decade, both Bitcoin and Nvidia have shown impressive returns: Bitcoin skyrocketed 29,000%, and Nvidia increased by 26,610%. These assets dominate social media discussions due to their futuristic growth potential. The question remains: which asset is the better choice for 2025?
Image source: Getty Images.
Analyzing Bitcoin for 2025
Bitcoin has seen two surges in 2024. The first occurred when Bitcoin spot ETFs were approved early in the year, followed by a second increase during the election season as former President Trump endorsed cryptocurrencies to engage younger voters. His administration has also appointed a crypto-friendly SEC head, Paul Atkins, and named David Sacks as the White House’s Crypto Czar, marking a historic first.
Many investors anticipate that favorable regulations will help Bitcoin prices rise further as it garners credibility among traditional financial players. Recently, Fed Chair Jerome Powell compared Bitcoin to gold, noting its virtual nature.
Additional potential benefits for Bitcoin may arise from strategic reserves and possible policy changes by the Trump administration regarding capital gains taxes for cryptocurrencies.
Future developments in regulations, among other factors, are expected to impact Bitcoin’s value next year. The cryptocurrency is likely to remain a high-volatility asset—trending upward alongside the S&P 500 but facing profit-taking from investors during market downturns.
Although Bitcoin might establish itself as a hedge against inflation and market volatility, it is still perceived as a high-risk investment. The evolving regulatory landscape and strong stock market momentum suggest a favorable future for Bitcoin.
Evaluating Nvidia’s Growth in 2025
Nvidia’s growth mirrors Bitcoin’s but stems from different reasons. Once an unknown manufacturer of GPUs, Nvidia now leads the AI industry, dominating the market for data-center GPUs necessary for applications like ChatGPT. Earlier this year, it briefly held the title of the world’s most valuable company, although Apple has since reclaimed that crown.
Assessing Nvidia’s future is more straightforward since it operates as a legitimate business with tangible profits. With a price-to-earnings ratio of 55, Nvidia’s revenue soared 94% in the third quarter. CEO Jensen Huang remarked on the “insane” demand for their new Blackwell platform, which exceeds current supply.
While analysts initially feared competition might undermine Nvidia’s dominance, this has not yet materialized despite new products from competitors like AMD and Intel. Nvidia’s comprehensive product ecosystem, including the CUDA software library, offers it a competitive edge.
Furthermore, Nvidia is developing an even more advanced platform, Rubin, reported to be six months ahead of schedule. Currently, challenges for Nvidia seem less about competition and more about potential risks from an AI bubble as skepticism rises over the sustainability of the current infrastructure race. Nevertheless, 2025 is likely to be another strong year for Nvidia due to the ongoing demand-supply gap.
Bitcoin vs. Nvidia: Where Should Your Money Go?
Looking ahead, both Bitcoin and Nvidia appear to be solid investment options given current market momentum and investor sentiment. Yet, I would prefer to invest in Nvidia. Its established business model and real earnings support its valuation, positioning it well for future gains.
Bitcoin, although promising, risks significant declines if the market encounters turbulence as its value largely hinges on market sentiment instead of solid fundamentals.
With Trump’s administration being favorable towards Bitcoin, 2025 could be a positive year for this cryptocurrency. However, Nvidia presents a more robust foundation with clearer growth prospects.
Is Now the Time to Invest $1,000 in Nvidia?
Before deciding to invest in Nvidia, consider this:
The Motley Fool Stock Advisor analysts recently identified what they consider the 10 best stocks to buy now, and Nvidia is not among them. The selected stocks have the potential to yield substantial returns in the years ahead.
If you had invested $1,000 in Nvidia when it was first recommended on April 15, 2005, you would have grown that to $827,780!
Stock Advisor offers a clear investment strategy, including guidance on building a portfolio, regular analyst updates, and two new stock picks each month. The Stock Advisor service has quadrupled the performance of the S&P 500 since 2002.*
See the 10 stocks »
*Stock Advisor returns as of December 9, 2024
Jeremy Bowman does not hold any interest in the stocks mentioned. The Motley Fool has investments in and recommends Advanced Micro Devices, Apple, Bitcoin, Intel, and Nvidia. They also recommend shorting February 2025 $27 calls on Intel. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are those of the author and do not necessarily represent those of Nasdaq, Inc.
