Over the past ten years, Bitcoin has become the most profitable investment in comparison with classic world assets. The cryptocurrency showed an average profitability of ten times higher than other investments.
The profitability of BTC for the aforementioned period was studied on Twitter by Charlie Bilello, CEO of the Compound Capital Advisors platform. The table he created gives an idea of how lucky the early Bitcoin investors were and how wealthy they became.
To begin with, let’s clarify that many cryptocurrencies have bypassed Bitcoin in terms of profitability, and they did it confidently. For example, here is the data from the Coingecko trading platform , which has been capturing information about the BTC exchange rate since 2013.
During this period, the cryptocurrency has grown by 80 thousand percent from $ 67.
And here is information on Ethereum, which was launched in 2015. It grew by almost 411 thousand percent, which is significantly more than the results of BTC over a longer period.
However, in this case, analysts compare classic assets with Bitcoin precisely because of the duration of its existence. Recall that the BTC network was launched in 2009, that is, it has been used for more than twelve years.
How much can you earn from investing in Bitcoin?
The Bilello table contains the major indices of the US stock market, bonds, precious metals and the common currency in the form of the US dollar. According to the data in the table, Bitcoin has averaged 230 percent annualized return on BTC over the past decade , according to Cointelegraph.
That is, an investment in a cryptocurrency on average brought in more than 200 percent within a year to holders of a blockchain asset. And this is an incredible result – especially against the background of classic bank deposits.
It is noteworthy that the most «fruitful» period for Bitcoin was 2013: during it, the cryptocurrency grew by at least 5507 percent in price. At the same time, investments in the index of the top 100 representatives of the Nasdaq brought in «only» an average of 20 percent per year.
Here is a table showing the performance of different assets. The cumulative – or overall – profitability of BTC is even hundreds of times ahead of its competitors.
Return on main assets table
In third place were the shares of the largest US companies, whose capitalization exceeds the $ 10 billion mark with a result of 14 percent. The fourth place was taken by shares of relatively small American companies: they have a 12.9 percent growth. By the way, this category of assets is the last in the list of investments with a two-digit average annual profitability, that is, who scored more than 10 percent.
Bitcoin is traditionally considered «digital gold», and compared to cryptocurrency, precious metal loses on all fronts. Since 2011, gold has generated an average of only 1.5 percent of income per year for its investors . Since the beginning of 2021 alone, the price of gold has managed to decrease by at least 8.5 percent.
We checked the actual data: the value of gold in Bitcoin has been falling rapidly over the past months, which is explained by the rising price of the cryptocurrency. The graph below clearly shows that the coin retains value and increases it better than the world’s most popular precious metal. Obviously, after examining this image, you simply won’t be able to accept criticism of BTC from fans of gold like Peter Schiff.
However, Bitcoin is also not so smooth: you should not write off short-term fluctuations in the price of cryptocurrencies, which can become unbearable for many investors. Among them is Barstool Sports founder Dave Portnoy, who acquired BTC last August for an average price of $ 11,500. The amount of his deal amounted to a million dollars, but after a couple of weeks, Portnoy sold the asset in a panic amid its fall. Portnoy’s total loss on investments in BTC was approximately $ 25,000.
Naturally, in the long term, Dave’s decision was a mistake: since then, the cryptocurrency has grown exponentially and even reached a record level of $ 61,711. However, since the investor was not used to such price jumps, he chose to sell BTC in order to prevent further losses. They, of course, would not have appeared in the case of the holding.
Now that Bitcoin is trading above $ 54,000 , Dave has realized his mistake. He recently tweeted that he «screwed up bitcoin a lot.» Here is his line, quoted by Decrypt.
I sincerely want to congratulate all my Bitcoin investors. Sometimes mistakes happen. I was unable to hold onto Bitcoin and sold it. I just can’t stand his ups and downs. I would like to have cryptocurrency now. I took all my money and invested it in what I think I know and can control. But I don’t know Bitcoin. I screwed up.
As you can see, a long-term investment strategy is confidently working over a long distance in the crypto market. For at least the past ten years, this tactic has never failed crypto investors who endured crashes and saved coins. At the same time, Bitcoin is still a very volatile asset, so not everyone will be able to calmly look at large price spikes on the BTC chart.
However, we believe that in the future, cryptocurrencies will become a much more popular phenomenon in the world, which will find application in various fields. Therefore, it is better to start getting used to abrupt changes in exchange rates right now.