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Ten-year performance of Bitcoin dominates all other assets

Photo of: Nathan VDH
by Nathan VDH

What to invest in? Gold, Nasdaq stocks, bonds, cryptocurrencies and especially Bitcoin? If annual return is the criterion of choice, then BTC trumps all other assets.

If you don’t have a lot of money, don’t try to emulate Elon Musk, the boss of Tesla. That’s the summary of Bill Gates’ recommendation to individual investors tempted by Bitcoin.

However, the document produced by the boss and founder of Compound Capital Advisors, Charlie Bilello, could encourage them to invest in the cryptocurrency anyway. The latter compiles the performance of the main asset classes.

And in terms of annual return, Bitcoin thus wins by a wide margin over all other investments over the past 10 years. Better yet, the supremacy of the first of the cryptocurrencies is unquestionable.

As measured by Roberto Talamas, a researcher for Messari, Bitcoin has an average annualized return of 230%. This makes it more than ten times better than the second largest asset class in terms of returns in comparison.

BTC is therefore crushing the second asset class, the Nasdaq 100 Index. However, this one has nothing to be ashamed of with an annualized return of 20%. This is better than the capitalization of the largest US companies (14%).

But what about gold, which Bitcoin is often compared to? Since 2011, the precious metal has shown an annual return of 1.5%. Moreover, in 5 of the 11 years analyzed, the returns were negative.

This comparison could prompt a growing number of investors to allocate part of their portfolio to Bitcoin rather than gold. In fact, this is one of the trends that could pull the value of the crypto-asset even further.

“People see it supplanting gold as a store of value. So, you know, I think a million dollars as a price target within ten years is very reasonable,” thus considers the boss of Kraken.

For Jesse Powell, Bitcoin is simply a “better version of gold”. In a recent note, Jurrien Timmer, director of Fidelity, also stressed the advantages of cryptocurrencies over gold.

Thus, he said, BTC would have a serious advantage: “Bitcoin’s supply, by design, is limited. “But Bitcoin could also nibble away at the envelope usually allocated to government bonds.

The digital assets expert believes anyway “that bitcoin will, over time, take more market share from gold. “Moreover, in the current monetary environment, investors would be well advised to favor store of value over bonds.”