S&P 500 outperformed the crypto market by this much since 2021

First, cryptocurrencies gained popularity as a substitute for traditional finance (TradFi), which consists of the stock market, banks, and fiat currencies. But over time, the cryptocurrency market has evolved to resemble TradFi more and more, fiercely vying for investors' attention.

The end of a tremendous bull market in 2021 saw the apex of both the stock and cryptocurrency markets. Since then, the latter has done better than the entire crypto market cap index, which is the total capitalization of all cryptocurrencies.

Specifically, the S&P 500 retained about 15% of its value longer than the bitcoin market. Furthermore, while cryptocurrency is still halfway to its peak, the world's main stock market index recently hit fresh all-time highs.

At present, the valuation of the S&P 500 is $4,890, whilst the other has a capitalization of $1.568 trillion. The value of the entire cryptocurrency market reached a notable peak in 2021—$3 trillion.

S&P 500 vs. Total Crypto Market Cap, weekly chart. Source: TradingView

It's interesting to note that enlarging the chart would yield a similar outcome. Since 2014, the stock market—represented by the S&P 500—has beaten cryptocurrency by over 10%.

It is noteworthy that between 2017 and 2020, cryptocurrencies separated from stocks. This occurred in the midst of the launching of numerous projects meant to address various concerns, but the momentum began to wane.

S&P 500 vs. Total Crypto Market Cap, weekly chart. Source: TradingView

As of this writing, institutional investors in traditional finance are becoming more interested in tokenization and cryptocurrency. Venture capitalists have invested in cryptocurrency firms, moving the industry away from non-profit and decentralized principles and into a TradFi-like economy.

In this case, it appears that a more level playing field fosters the growth of the stock market. Nevertheless, if a strong bull run develops in the upcoming months, cryptocurrency's volatility may work to its advantage.

Investors now have the option of choosing between TradFi and Decentralized Finance (DeFi), albeit they need to exercise caution while navigating such an uncertain and rapidly evolving environment.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.