Bitcoin's Compound Annual Growth Rate over the Last Decade

In the following SatsGoal article, we are going to explore Bitcoin's Compound Annual Growth Rate (CAGR) since 2011. Contrary to the recent news articles about Bitcoin’s many “crashes”, you will see that Bitcoin has shown exemplary performance on every long term outlook.

What is CAGR?

Compound Annual Growth Rate is the investment's average yearly growth rate over a period longer than one year. It is one of the most accurate ways to calculate and determine the ROI. Its formula is as follows:

Bitcoin’s CAGR over the years

The above table will help you to better understand Bitcoin’s Compound Annual Growth Rate (CAGR) over the last decade. For instance, it shows that Bitcoin has returned 117% on average every year for the past 5 years. Every single person who has bought and held Bitcoin for 4 years or more has seen the fiat value of their Bitcoin grow.

Am I late to Bitcoin?

Many people incorrectly think that they’re late to Bitcoin and that the years of huge price appreciation are behind us, however as you can see, this recent 117% average certainly continues to fit in the huge price appreciation category.

To further prove this, the S&P 500 which has long been thought of as one of the best performing asset classes, has had a CAGR of 10.67% since inception. Therefore Bitcoin having an average return of 10 times this amount in recent years shows that Bitcoin has shown no signs of slowing down to traditional asset class’s returns.

The power of compounding

To really illustrate how powerful a 5 year CAGR of 117% is – saving $1000 in Bitcoin at the start of 2017 and HODLing until the beginning of 2022 would have produced a fiat value gain of $47,117. That’s a 4,711.70% return, 48x your investment. As a final mind bending statistic, it would take nearly 66 years to realize the same return from a $1000 investment in the S&P 500 with its respectable 10% CAGR.

Using this data to estimate the future CAGR

In the short term, it's extremely difficult to accurately predict Bitcoin's price movement. This is where the advice to HODL your bitcoin instead of trying to trade it comes from.

However taking a long term view, users of SatsGoal can use this data to enter their estimated future compound annual growth rate into the Bitcoin calculator.

Conclusion

Knowing the CAGR of Bitcoin is crucial because it shows Bitcoin's outstanding long term performance solidifying its status as the best-performing financial asset of the past decade.