BTC holders’ 104% CAGR dwarfs the ‘stable growth’ portfolio

A comparison of Bitcoin (BTC)'s compound annual growth rate (CAGR) to the returns earned by Warren Buffett's portfolio — whose top holdings include Apple, Bank of America, American Express, Coca-Cola, and Chevron Corp. — reveals very different risk-reward profiles. Performance over different time frames.

Warren Buffett's portfolio: Less risk, same return as stocks

For example, according to the data source Lazy Portfolio ETF, Warren Buffett's portfolio has achieved a CAGR of 10.03% over the past 30 years with a standard deviation of 13.67%. In comparison, US company stock portfolios delivered more or less similar returns but with higher standard deviations.

In other words, Oracle of Omaha's portfolio is less volatile or risky than US stock portfolios, but it has achieved impressive results. His investment philosophy focuses on long-term value investing, careful risk management and the selection of fundamentally strong companies.

Bitcoin beat Buffett's risky portfolio

In comparison, Bitcoin's performance has been nothing short of extraordinary. In the year Since its inception in 2011, Bitcoin has experienced an average annual gain of about 104%. This figure easily beats the average returns of Buffett's and US stock portfolios over the past 13 years.

Bitcoin's CAGR is much higher than its safe-haven rival, gold, which has returned an average of 6% over the same period. This suggests that US stock portfolios have achieved a CAGR comparable to Buffett's portfolio, but its high volatility makes it unsuitable for risk-averse investors.

With a modest 6% average annual return over the past decade, gold provides relative stability and acts as a hedge against economic downturns.

Many traders and investors see Bitcoin as “digital gold” as a hedge against inflation and currency collapse.

This awareness has enhanced its appeal as a property over the years. In particular, several US companies, such as MicroStrategy and Tesla, added bitcoin to their portfolios, and then bitcoin exchange-traded funds (ETFs) were launched, which further strengthened its position among institutional investors.

Despite this, Bitcoin remains highly volatile compared to the stable returns of Buffett's portfolio. In recent years, however, Bitcoin has shown less volatility than many S&P 500 stocks, including Tesla, Meta and Nvidia.

Related: Warren Buffett's Berkshire Hathaway Has Crashed 99% on Bitcoin Since 2015

Buffett's portfolio represents a more conservative, long-term strategy with consistent returns and manageable risk, despite exposure to pro-Creto Neobank in New Holdings.

In contrast, Bitcoin has delivered very high returns over the past 13 years, despite significant volatility and several major downturns.

This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.