Stocks vs. Bitcoin: How the Two Have Compared

By Kristi Waterworth – Updated Jul 9, 2026 at 11:58 AM EST | Fact-checked by Frank Bass

Key Points

Bitcoin's CAGR from 2016-24 was 81%, outperforming S&P 500's 15%.
Bitcoin's volatility is high with a standard deviation of ~203%.
Bitcoin and stocks generally move together, not suitable as a hedge.

Increasingly, investors are viewing Bitcoin as a serious equity, either alongside or as a substitute for their normal stock portfolio. However, the question really isn't stocks vs. Bitcoin, but something a lot more subtle: is Bitcoin right for a long-term investing portfolio?

It's a highly volatile instrument, and not right for all investors. But for those who can stomach the highs and lows, it's important to look at the data and really understand what Bitcoin is doing, why it's doing that, and what that means longer term.

Bitcoin has dramatically outpaced stocks since 2016

Bitcoin is a dramatic instrument and has led to both fortunes and failures for investors, depending on when they got in … and when they got out. According to Robert Schiller in 2025, the average stock market return was approximately 15% from 2016-24; for Bitcoin, FactSet in 2025 reported a return of almost 81% over the same period. The table below shows the breakdown year by year.

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Source: Bitcoin - FactSet / S&P 500 - Shiller/Yale
Year	S&P 500 Return	Bitcoin Return
2016	11.7%	107.9%
2017	20.9%	600.2%
2018	-1.8%	89.3%
2019	26.2%	-2.2%
2020	18.5%	51.0%
2021	28.3%	327.1%
2022	-15.0%	-40.5%
2023	21.7%	2.3%
2024	30.0%

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The best year for Bitcoin was 2017, with a gain of more than 600%; the worst year was 2022, with a loss of 40.5%. For stocks, the best year was 2024, with a 30% increase; the worst year was 2022, with a 15% loss. There's a lot of difference in the magnitude of volatility here.

However, it's clear that the win-rate symmetry is identical: both have eight positive years out of the last 10, despite the difference in swings. This data is based on annual average prices, so any individual investor may have a different experience in those years depending on when they bought or sold.

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Source: Bitcoin - FactSet / S&P 500 - Shiller/Yale
Returns	Percentage
Bitcoin CAGR 2016–2024 (annual avg price basis)	80.8%
S&P 500 CAGR 2016–2024	15.0%
Bitcoin avg annual return 2016–2024 (simple)	131.8%
Bitcoin best year: 2017	+600.2%
Bitcoin worst year: 2022	-40.5%
Bitcoin 2024 return	+128.6%
S&P 500 2024 return	+30.0%

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Completely different things drive Bitcoin and stocks

When looking at Bitcoin vs. stocks, though, it's important to remember that entirely different mechanics drive them. Stock prices tend to be earnings-driven, and often pay some kind of dividend. Bitcoin is largely driven by sentiment, as it has few use cases and never pays dividends. However, having a limited supply of approximately 21 million coins can create scarcity. It's a vibes investment right now, though that could change as it gains in popularity.

Bitcoin's price moves up and down as it's purchased, which right now is by a mix of individual enthusiasts and institutional Bitcoin holders. For example, the spot Bitcoin ETF iShares Bitcoin Trust (IBIT) was approved by the SEC in January 2024, and the US. Strategic Bitcoin Reserve was established in 2025 through an executive order. Although it's still mired in red tape and working through regulatory development, reporting from CoinDesk in 2026 places the potential US Bitcoin reserve at approximately 300,000 coins. These were largely acquired through forfeiture, according to reporting by The Block in 2026.

Bitcoin's standard deviation of annual returns, essentially an indication of the coin's volatility, was about 203% between 2016 and 2024. The same metric for the S&P 500 was just 15%. This is the average year-to-year price swing over that period.

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Source: Various
What Drives Bitcoin		Source
Bitcoin supply cap	21 million coins	Bitcoin protocol
Bitcoin dividend/income yield	0%	N/A
SEC approved spot bitcoin ETFs	January 2024	SEC
U.S. Strategic Bitcoin Reserve established	March 2025	White House Executive Order
Bitcoin ATH (approx)	~$124,7520 (Oct 2025)	CoinMarketCap

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Bitcoin has moved with stocks more than against them

However dramatic Bitcoin's results have been for some investors, it's also important to note that it is in no way a hedge against bad years in the stock market. In fact, Bitcoin tends to move with stocks far more than it moves against them, as shown in the table above. In only two out of those 10 years did Bitcoin and the S&P 500 move in different directions. For example, in 2022, they both fell dramatically -- the S&P 500 by 15% and Bitcoin by 45%. Institutional investors have only increased this correlation.

It's important to note that Bitcoin produces no income on its own. Its only return comes from price appreciation. The portfolio case for Bitcoin, then, rests purely on the potential rise in value due to interest and the scarcity factor. This is very similar to the correlation-based logic that supports gold, as opposed to stocks, which are tiny shares in actual companies that create things and generate income.

What the return and volatility record of Bitcoin vs. stocks means for investors

Although the nine-year CAGR favors Bitcoin by almost 81% versus the 15% CAGR for the S&P 500, the volatility data shows why most portfolios do not hold significant amounts of Bitcoin or Bitcoin-based assets.

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Source: Bitcoin - FactSet / S&P 500 - Shiller/Yale
Volatility Metrics
Bitcoin std deviation 2016–2024	~203%
S&P 500 std deviation 2016–2024	15.0%
Bitcoin positive years 2016–2024	8 of 10 (80%)
S&P 500 positive years 2016–2024	8 of 10 (80%)

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Put another way, an investor who bought Bitcoin at the beginning of 2016 and held through 2024 may have earned 81% on their coins, but one who entered in fall 2025 is currently feeling pretty serious pain with no promise they'll recover. Wins and losses in Bitcoin largely come down to luck, not good judgment, and just buying Bitcoin when sentiment is down and holding it until sentiment is up again, if it ever does recover.

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About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

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