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Why Bitcoin outperforms SP500 ?



Investing in S&P500


Mainstream investing for many people means buying and selling stocks. Sounds easy but which stock to buy? If you want to minimise the risk, you can invest in S&P500 index which is a market-capitalization-weighted index of the 500 largest U.S. publicly traded companies. S&P index always was a safe bet because it’s very well diversified and annual can generate a steady profit over time.


sp500 daily chart




Investing in Bitcoin

 S&P is over 60 years old invention and although it still works there are better tools to make money. One of them is cryptocurrency.
There are over 1000 coins available to invest but one which reflects and dominate the whole market is Bitcoin. In my previous article I pointed out that BTC is not the best crypto-investment, but it does reflect market trend and sentiment. Similarly to SP500, investing in Bitcoin is the safe move if You don’t want to analyse every cryptocurrency available to buy.  Cryptomarket is very volatile and because of that can be scary for many new players. But how BTC looks like in comparison to SP500? Does Bitcoin outperforms SP500 ?


btc daily chart



Why Bitcoin outperforms SP500 ?

 As an investor, you want maximum profit with minimum risk. Choosing good old strategy to achieve our goal is OK most of the times. But sometimes old strategy can underperform, harming your wallet. Analysing closely two assets can revile hidden gems. I’m talking about Bitcoin outperforms SP500 a big time.

Many investors don’t consider buying cryptocurrency just because mainstream media releases only bad news about Bitcoin. When you calculate average annual return on investment on BTC and SP500 you soon realise how much money you could make.

Bitcoin outperforms SP500

Bitcoin outperforms SP500

Let’s crunch some numbers.

Average ROI for SP500 is 9% for 6 years period. Same 6 years period for BTC brings you a staggering 59% ROI.

While there are big gains for Bitcoin,  you could lose as well. Chances that you would lose by investing at the wrong moment are only 16%.  That gives you 84% chances that if you buy Bitcoin at the beginning of year you will gain 50% on average. So starting at 2015 if you invest 1000$ each year you would make a profit of 2500$ and about 100$ lose.

If you invest the same amount at SP500 your ROI would be around 600$. It is 4 times lower than the profit from BTC.

Another good argument for crypto-investment is the fact that you can buy Bitcoin and keep it without worrying about price fluctuations. While betting on SP500 involves CFD trading which can be very risky if the market goes against you.


Conclusion on Bitcoin outperforms SP500

 Analysing markets and assets of our choice is a key to success. Financial media ( press releases, TV news) not always give a proper perspective, which can result in poor investment decisions. Diversifying your portfolio also means playing on deferent markets to maximise profit and minimise risk.


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