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Wednesday, June 12, 2024
HomeCryptoBitcoin beats Warren Buffett's low-risk portfolio with 104% average annual return

Bitcoin beats Warren Buffett’s low-risk portfolio with 104% average annual return

Compare Bitcoin’s compound annual growth rate (CAGR) to the returns achieved by Warren Buffett’s portfolio – with top stocks being Apple, Bank of America, American Express, Coca-Cola and Chevron Corp – shows completely different profit and risk profiles in different time frames.

Warren Buffett’s portfolio: Less risk, same returns as stocks

According to Lazy Portfolio ETF data source, Warren Buffett’s portfolio has achieved a CAGR of 10.03% with a standard deviation of 13.67% over the past 30 years. By comparison, stock portfolios of US companies deliver more or less similar returns but with a higher standard deviation.

Warren Buffett’s portfolio compared to his US stock portfolio. Source: Lazy Portfolio ETF

In other words, the Omaha legend’s portfolio has delivered impressive results despite being less volatile or risky than his US stock portfolio. His investment philosophy emphasizes long-term value investing, prudent risk management, and prioritizes companies with solid fundamentals.

Bitcoin beats Buffett’s risk-reducing portfolio

By comparison, Bitcoin’s performance is not surprising. Since its trading launch in 2011, Bitcoin has delivered a staggering average annual return of around 104%. On average, this easily beats the returns from Buffett’s portfolio and his U.S. stock portfolio every year over the past 13 years.

Bitcoin annual returns. Source:

Bitcoin’s CAGR is also much higher than its safe-haven rival gold, which has returned an average of 6% annually over the same period. This suggests that although the US stock portfolio has achieved a CAGR comparable to Buffett’s portfolio, its higher volatility may make it unsuitable for risk-averse investors. ro.

Gold, with a modest average annual return of 6% over the past decade, offers relative stability and acts as a hedge against economic downturns.

Gold average annual return performance chart. Source:

Many traders and investors consider Bitcoin to be “digital gold,” acting as a hedge against inflation and currency devaluation.

This perception has enhanced its appeal as an asset over the years. Notably, several US companies, such as MicroStrategy and Tesla, have added Bitcoin to their reserves, followed by the launch of spot Bitcoin ETFs that have further strengthened the cryptocurrency’s position top for institutional investors.

Total inflows into the US Bitcoin ETF. Source: Farside

That said, Bitcoin remains highly volatile, with its price fluctuating wildly when compared to the steady returns in Buffett’s portfolio. However, in recent years, Bitcoin has had lower volatility than many S&P 500 stocks, including Tesla, Meta, and Nvidia.

Buffett’s portfolio represents a more conservative, long-term strategy with steady returns and manageable risk, despite exposure to a crypto-friendly* neobank, Nu Holdings .

By contrast, Bitcoin has delivered much higher returns, despite significant volatility and several major downturns over the past 13 years.

*Neobank is a completely online digital bank, without physical facilities like traditional branches. Neobanks often provide banking services through mobile applications or websites, allowing customers to perform financial transactions flexibly and conveniently from anywhere with an internet connection.


According to Cointelegraph

Mark Tyson
Mark Tyson
Freelance News Writer. Always interested in the way in which technology can change people's lives, and that is why I also advise individuals and companies when it comes to adopting all the advances in Apple devices and services.


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