Bitcoin’s 94% Yearly Rally Compared to S&P 500’s 9.5% Gain: A Stark Contrast Between Risk and Reward

Recent data and analysis reveal that Bitcoin and the S&P 500 have shown dramatically different returns and risk characteristics over the last ten years. If you had invested $10,000 in

in May 2015, your investment would have grown to nearly $3.8 million by May 2025, representing a cumulative gain of about 38,000% and an average annual growth rate (CAGR) close to 94% Bitcoin vs S&P 500: A 10-Year Performance [ 1 ]. By comparison, the S&P 500 returned around 148% during the same timeframe, with a CAGR of roughly 9.5% Bitcoin vs S&P 500: A 10-Year Performance [ 1 ]. This sharp contrast highlights Bitcoin’s remarkable growth but also its high volatility, as it endured several declines of more than 80% throughout the decade, while the S&P 500’s largest drop was about 35% Bitcoin vs S&P 500: A 10-Year Performance [ 1 ].

Measures of volatility further illustrate the risk gap between these assets. Bitcoin’s average standard deviation of returns ranged from about 70% to 90%, whereas the S&P 500’s was closer to 15–20% Bitcoin vs S&P 500: A 10-Year Performance [ 1 ]. Bitcoin frequently saw daily price changes above 10%, while the S&P 500 generally fluctuated within 1–2% per day. A hypothetical portfolio split 90% in the S&P 500 and 10% in Bitcoin from 2015 to 2025 would have produced returns of about 500–700%, with much lower volatility than an all-Bitcoin portfolio Bitcoin vs S&P 500: A 10-Year Performance [ 1 ].

When adjusting for risk using simplified Sharpe ratios, Bitcoin still comes out ahead, though with important caveats. Bitcoin’s Sharpe ratio is estimated at around 1.3, compared to the S&P 500’s 0.7, indicating greater returns per unit of risk Bitcoin vs S&P 500: A 10-Year Performance [ 1 ]. However, Bitcoin’s significant price swings and lack of dividend income (unlike the S&P 500’s annual yield of about 1.5–2%) mean it is better suited as a speculative addition rather than a portfolio’s foundation. Growing institutional interest, such as the launch of spot Bitcoin ETFs in 2024–2025 and corporate investments from companies like MicroStrategy, has started to reduce Bitcoin’s volatility, but it remains far from a stable asset Bitcoin vs S&P 500: A 10-Year Performance [ 1 ].

The relationship between Bitcoin and the S&P 500 has varied widely. In the past five years, their 30-day correlation has often surpassed 70%, showing that they tend to move together during periods of economic stress. Yet, in certain times such as Bitcoin’s 2019 rally, the correlation turned negative as Bitcoin’s unique supply factors set it apart from stocks. Recent figures from 2024–2025 show Bitcoin rising about 70.4% year-to-date, while the S&P 500 gained 11.23%. Bitcoin’s annualized volatility stood at 42.54%, compared to 19.86% for the S&P 500 Is Bitcoin’s 4-Year Cycle About to Break? [ 3 ].

Investment strategies stress the importance of diversification and considering the investment timeframe. Bitcoin is best used as a speculative hedge or inflation protection in small allocations (5–15%), especially when interest rates are low Bitcoin vs S&P 500: A 10-Year Performance [ 1 ]. The S&P 500, offering broad exposure to 500 major U.S. companies, remains a solid choice for building long-term wealth and retirement savings. Combining the two, such as with a 90/10 allocation, can capture Bitcoin’s upside while reducing its volatility Bitcoin vs S&P 500: A 10-Year Performance [ 1 ].

Changes in regulation, including a 2025 U.S. executive order prioritizing digital assets, could further influence Bitcoin’s future. By lowering barriers for institutions and encouraging stablecoin adoption, these policies may help extend the current bull run and lessen the risk of severe downturns. Nonetheless, issues such as regulatory ambiguity, debates over energy use, and competition from other cryptocurrencies still pose challenges.