Bitcoin, at first glance, in its early stages looked to be just another fad that was destined to fade away. The only people that really knew how it worked were people who were early adopters and understood the tech behind it.
Over the years though, bitcoin has shown that it is here to stay. While simultaneously returning profit margins the likes of which had never been seen before.
The performance of bitcoin since inception has outpaced major financial markets in existence. Markets like the S&P, the NASDAQ, and the all-popular gold have failed to return even a third of bitcoin’s returns. And even when combined, the year over year returns of bitcoin still beats out all of these markets.
Despite its largely fluctuating prices, bitcoin’s year on year return, annual compound growth rate, and Sharpe Ratio still leads all of the markets. The numbers show that none of these markets are a match for the pioneer cryptocurrency.
Let’s Set Out The Numbers
According to this post, bitcoin has consistently pulled in over 200% growth every year since inception. Average year over year growth for the digital asset sits at 295%.
In comparison to this, the average year over year growth for the S&P for the past 10 years is currently at 31%. Gold has brought in only negative returns, sitting at minus 11%. The NASDAQ leads the pack with a year over year growth of 34% in the last 10 years. Not even up to 20% of bitcoin’s returns.
Moving on to compound annual growth rate (CAGR) for 10 years for each of these, the disparity in this is just as wide. While bitcoin has seen a 131% CAGR in the past 10 years, the rest of the pack has not fared so well. For example, the CAGR for the S&P sits at 14%. The CAGR for the NASDAQ sits at 19%, while that of gold is, once again, negative, at minus 0.12%.
Now, as for the Sharpe Ratio, bitcoin proves dominance once again. Bitcoin’s Sharpe Ratio is currently 2.85. While that of the NASDAQ and gold are 1.84 and minus 0.84 respectively. The Sharpe Ratio for the S&P is 2.23, which is the only metric where one of these markets has come close to bitcoin, but not quite matching it.
(Please note that for the Sharpe Ratio, the higher the number, the better it is.)
There is simply no comparison between them. It is obvious which is the superior market currently. The total returns for bitcoin in the last decade has been 470,000%. No market besides bitcoin currently can boast of such numbers. And the returns of bitcoin are expected to continue to be massive.