Bitcoin vs. Traditional Investments
The last five years have been a wild ride for global markets. Traditional stock indices like the S&P 500 and Nasdaq 100 delivered strong returns, rewarding investors who stayed the course. But if you had put just $1,000 into Bitcoin (BTC) in August 2020, your gains would have dwarfed those from index funds.
This comparison shows the dramatic difference between the relatively stable world of stock market investing and the volatile yet highly rewarding path of cryptocurrency. While Wall Street delivered steady, predictable growth, Bitcoin’s journey was marked by euphoric rallies, painful crashes, and a long-term trend that still outpaced almost every other asset class.
Traditional Investments: Solid but Predictable Returns
Let’s begin with what would have happened if you chose traditional stock market funds:
- Vanguard 500 Index Fund (VOO): $1,000 invested in August 2020 would now be worth $2,038 — a 15.3% compound annual growth rate (CAGR).
- Invesco QQQ Trust (QQQ): Tracking the Nasdaq-100, that same $1,000 would now be $2,097, thanks to tech’s dominance.
Both are respectable results, showing that even in uncertain times, diversified funds have rewarded patient investors.