Bitcoin’s compound annual growth rate (CAGR) has shown striking differences when compared to the returns generated by Warren Buffett’s portfolio, comprised of top holdings like Apple, Bank of America, American Express, Coca-Cola, and Chevron Corp, over various time periods.
Warren Buffett’s portfolio, known for its low risk profile, has achieved a CAGR of 10.03% with a standard deviation of 13.67% in the last 30 years, as per data from Lazy Portfolio ETF. In contrast, U.S. stock portfolios have yielded similar returns but with higher standard deviations.
Buffett’s investment strategy focuses on long-term value investing, prudent risk management, and investing in fundamentally strong companies, resulting in impressive returns with lower volatility compared to U.S. stock portfolios.
On the other hand, Bitcoin’s performance has been exceptional since its inception in 2011, boasting an average annual return of approximately 104%. This outperforms both Buffett’s portfolio and U.S. stock portfolios consistently over the past 13 years.
Bitcoin’s CAGR surpasses that of gold, which has seen an average annual return of 6% over the same period. While U.S. stock portfolios have matched Buffett’s returns, their higher volatility may not suit risk-averse investors.
Often referred to as “digital gold,” Bitcoin is seen as a hedge against inflation and currency devaluation, attracting interest from companies like MicroStrategy and Tesla. The launch of spot Bitcoin exchange-traded funds (ETFs) has further solidified its position among institutional investors.
Despite its volatility, Bitcoin has exhibited lower fluctuations compared to certain S&P 500 stocks in recent years, such as Tesla, Meta, and Nvidia.
Warren Buffett’s Berkshire Hathaway portfolio, with exposure to a pro-crypto neobank like Nu Holdings, represents a conservative, long-term strategy with stable returns and manageable risk. In contrast, Bitcoin offers higher returns but with significant volatility and occasional downturns.
It is essential to note that this article does not provide investment advice. Readers are advised to conduct thorough research before making any investment decisions.