Bitcoin Outperformed Traditional Assets by Over 26,000% in the Last Decade

From coingecko by Prem Reginald Edited by Shaun Paul Lee

Bitcoin ( BTC ), coined as “Magic Internet Money” is perhaps a legitimate investment asset alongside traditional assets such as stocks, commodities, and bonds. From its returns over 10 years, BTC truly shined with its 26,931.1% returns. Imagine a $100 investment in 2014 is now worth $26,931.1 today. While these figures are great, it's important to look at its performance relative to other assets in both the short & long term. 

Which asset performed best across YTD, 1-Year, 3-Year, 5-Year, and 10-Year time frames?

Period Bitcoin S&P500 Gold Crude Oil 5-Year Treasuries 10-Year Treasuries

YTD Returns	129.0%	28.3%	32.2%	-0.13%	5.3%	8.2%
1-Year Returns	153.1%	33.1%	34.8%	-3.8%	-2.5%	-0.4%
3-Year Returns	79.0%	34.1%	53.1%	6.1%	267.8%	218.0%
5-Year Returns	1,283.6%	96.7%	84.6%	25.3%	169.5%	149.9%
10-Year Retuns	26,931.1%	193.3%	125.8%	4.3%	157.1%	86.8%

Performance over different time frames sheds light on the strengths and weaknesses of each asset. In 2024, BTC was the best-performing asset with 129.0% returns highlighting its high-growth potential. Gold followed with a steady 32.2% year-to-date (YTD) returns, demonstrating its reliability as a traditional store of value. The S&P 500 remained strong at 28.3% returns. Crude oil, however, dipped with a return of -0.13%, while US treasuries offered modest returns, with 5-year Treasuries at 5.3% and 10-year Treasuries slightly higher at 8.2%.

Looking at a 1-year timeframe, Bitcoin’s performance continues to outshine other assets with a 153.1% return. Gold has had a 34.8% return, followed by the S&P 500 at 33.1%. The strength of these 3 assets shows the market stability over the last year.  Treasuries, however, reflect sensitivity to economic changes, with 5-year and 10-year bonds posting returns of -4.3% and -2.6%, respectively. These figures reveal how bonds can fluctuate with interest rates and fiscal policies.

Over three years, the performance landscape shifted, favoring bonds as economic stability became more desirable. Treasuries led, with 5-year Treasuries showing an impressive 267.8% return and 10-year Treasuries close behind at 218.0%. Bitcoin followed over this period at 79.0%, while gold trailed behind with a solid 53.1% return, providing security in market uncertainty. Crude oil was the only asset to underperform during this period, with a 6.1% return. 

The 5-year horizon sees Bitcoin rise to the top, yielding a remarkable 1,283.6% return. The S&P 500 and gold remain stable with 96.7% and 84.6% returns, respectively, each providing substantial, consistent gains. Treasuries also performed well, with 5-year Treasuries at 157.1% and 10-year Treasuries at 149.9%. Crude oil, showing limited growth at 25.3%, appears less compelling for longer-term investment. This period shows Bitcoin’s potential for substantial returns in a mid-term investment window, balanced by the steady growth of equities and gold.

From a full 10-year perspective, Bitcoin’s growth stands unmatched at 26,931.1%, affirming its transformative investment potential for early adopters. Although other assets trail far behind, they still offer consistent returns, with the S&P 500 at 193.3% and gold at 125.8%. Treasuries, too, maintain value, with 5-year Treasuries returning 157.1% and 10-year Treasuries at 86.8%. Crude oil, however, lags with a mere return of 4.3%. This decade-long view reveals Bitcoin as the ultimate high-growth asset, with gold, bonds, and equities providing safer, lower-return alternatives for risk-averse investors. However, Bitcoin was still a relatively new asset, with a significantly smaller market cap than other assets. This smaller base enabled it to grow at a much quicker pace.

Has Bitcoin been highly volatile over the last 10 years?

Bitcoin’s massive gains over the last decade came with significant volatility. BTC price has been as low as $172.15 and has peaked at $103,679. The chart below clearly indicates the BTC cycles which coincidentally occur every four years following the BTC halving. Throughout these 10 years, there have been 2 “bull run” cycles, which took place in the years 2017-2018 and 2020-2021, and are currently in the midst of one. At the end of the cycle, BTC prices tend to crash beyond 70% of their peak. Thus making BTC to be volatile. This extreme variability underscores Bitcoin’s high-risk, high-reward nature, making it appealing to growth-focused investors but challenging for those seeking stability 

Does Bitcoin’s performance correlate with other assets?

Volatility aside, Bitcoin's relationship with other major assets, such as the S&P 500 and gold, provides further insight into its unique behavior. A correlation analysis reveals how Bitcoin aligns, or fails to align, with traditional markets:

Bitcoin & S&P 500 

Over the years, Bitcoin’s correlation with the S&P 500, shown in the blue line, has been inconsistent, often hovering close to zero, until 2018. This low correlation suggests that BTC largely behaved independently of equity markets during that period. However, since 2020, the relationship has strengthened, with Bitcoin aligning more closely with stocks during major economic events like the COVID-19 pandemic. The price correlation also aligns with BTC’s pumps in 2018, 2020 and 2024.

Bitcoin & Gold

When it comes to gold, Bitcoin’s correlation is inverse to its correlation to S&P 500. This suggests that Bitcoin and gold (shown in the green line) often move independently of each other, despite both being viewed as alternative investments. It is also observed that the correlation moves opposite to BTC’s price. As the price goes up, the correlations move downwards and vice versa. This suggests that investors tend to shift to gold investment when BTC underperforms. However, brief spikes in correlation typically occur during macroeconomic events, reflecting moments when both assets respond to similar market conditions. Still, Bitcoin has yet to fully establish itself as a digital equivalent of gold.

Bitcoin vs traditional assets over 10-years

Bitcoin price returns versus traditional assets over a 10-year time frame are as follows:

Rank Asset Price Returns

1	Bitcoin	26,931.1%
2	S&P 500	193.3%
3	5-Year Treasuries	157.1%
4	Gold	125.8%
5	10-Year Treasuries	86.8%
6	Crude Oil	4.3%

Methodology

This analysis is based on historical performance data from CoinGecko and Yahoo Finance, examining Bitcoin, gold, the S&P 500, crude oil, and Treasuries across YTD, 1-year, 3-year, 5-year, and 10-year periods as of December 11, 2024. By focusing strictly on historical performance without speculating on future events, this data-driven approach aims to provide a grounded perspective on the performance returns of these assets.