Bitcoin vs S&P 500: Historical Performance Compared

Performance at a Glance

Bitcoin and the S&P 500 are two of the most widely tracked assets in the world, but they differ in almost every dimension: return magnitude, volatility, drawdown severity, and the type of investor they attract. Bitcoin has delivered dramatically higher compound returns over the past decade, but with drawdowns that routinely exceed 70%: a tradeoff that makes direct comparison more nuanced than raw return figures suggest.

The following table provides a snapshot of key performance metrics for both assets. All figures use year-end prices and include S&P 500 total returns (with dividends reinvested).

Bitcoin's 10-year CAGR of approximately 70% dwarfs any traditional asset class over the same period. However, the 5-year CAGR drops to roughly 25% when measured from the 2021 bull market peak: a reminder that entry timing matters enormously with Bitcoin.

Calendar Year Returns: 2016 to 2025

Comparing annual returns reveals Bitcoin's extreme dispersion. In its best years, Bitcoin returned 10x or more. In its worst, it lost over 65%. The S&P 500 has never lost more than 20% in a single calendar year during this period.

Bitcoin posted positive returns in 7 out of 10 years, the same as the S&P 500. The critical difference is magnitude: Bitcoin's up years routinely delivered triple-digit gains, while the S&P 500's best years were in the 25-32% range. The same asymmetry applies to the downside: Bitcoin's worst calendar years saw losses of 65-72%, compared to a maximum S&P 500 loss of 18%.

The Bitcoin halving cycle heavily influences these return patterns. The April 2024 halving reduced the block subsidy from 6.25 to 3.125 BTC, and like prior halvings, was followed by a significant price appreciation in 2024 (+121%). For a deeper look at how supply dynamics shape Bitcoin's price trajectory, see our analysis of whether the four-year cycle still holds.

Compound Growth Over Multiple Time Horizons

Bitcoin's compound annual growth rate (CAGR) varies dramatically depending on the start and end dates chosen. This is one of the most important caveats when comparing it to the S&P 500: a 10-year window starting from 2016 captures a 70% CAGR, but a 5-year window starting from the 2021 peak cuts that to roughly 25%.

The following CAGRs are calculated from year-end closing prices. For the S&P 500, these are total returns including dividends.

• 10-year (end 2015 to end 2025): Bitcoin grew from approximately $430 to $87,500, a CAGR of roughly 70%. The S&P 500 grew from 2,044 to 6,846, a CAGR of roughly 13%.
• 5-year (end 2020 to end 2025): Bitcoin grew from $29,000 to $87,500, a CAGR of roughly 25%. The S&P 500 grew from 3,756 to 6,846, a CAGR of roughly 13%.
• 3-year (end 2022 to end 2025): Bitcoin grew from $16,547 to $87,500, a CAGR of roughly 74%. The S&P 500 grew from 3,840 to 6,846, a CAGR of roughly 21%.

The 3-year CAGR for Bitcoin is the highest because it starts at the bottom of the 2022 bear market. This illustrates a broader truth: the best entry points for Bitcoin have historically been during drawdowns of 70% or more, which is why dollar-cost averaging is frequently recommended to smooth out timing risk.

Volatility and Risk Metrics

Raw returns only tell half the story. Volatility determines how much pain an investor endures along the way and whether they can realistically hold through a drawdown to capture the eventual recovery.

Bitcoin is roughly 4x more volatile than the S&P 500 on an annualized basis. Despite this, its Sharpe ratio (return per unit of risk) has been higher than the S&P 500's over the 2020-2024 period, according to Fidelity Digital Assets research. A Sharpe ratio of 0.96 for Bitcoin versus 0.65 for the S&P 500 means that Bitcoin has compensated investors for its additional risk: at least over that window.

Bitcoin's volatility has been declining structurally over time. Annualized volatility exceeded 200% in Bitcoin's early years and has trended down toward 45-55% in recent cycles. By late 2023, Bitcoin was less volatile than 92 individual S&P 500 constituent stocks. The approval of spot Bitcoin ETFs in January 2024 further dampened volatility by introducing institutional market-making infrastructure. For context on this milestone, see our research on Bitcoin ETF institutional adoption.

Maximum Drawdowns and Recovery Times

Maximum drawdown measures the largest peak-to-trough decline an asset has experienced. This is the metric that tests whether an investor can actually hold through the pain required to capture long-term returns.

Bitcoin Drawdowns

Every major Bitcoin drawdown has exceeded 75%. Recovery times have ranged from 18 months to 3 years. The pattern is consistent: each cycle establishes a higher floor, with troughs in each successive cycle remaining above the prior cycle's peak. This is part of what drives the Bitcoin rainbow chart models that attempt to map long-term valuation bands.

S&P 500 Drawdowns

The S&P 500's worst drawdown during this century was -56% during the 2008-2009 financial crisis, and recovery took approximately four years. Outside of extreme systemic events, S&P 500 drawdowns rarely exceed 35%, and recent recoveries have been faster due to aggressive monetary policy responses.

Correlation Between Bitcoin and the S&P 500

The correlation between Bitcoin and the S&P 500 determines how useful Bitcoin is as a portfolio diversifier. A low or negative correlation means adding Bitcoin reduces overall portfolio risk; a high positive correlation means it provides returns but no diversification benefit.

Over the past five years, the 90-day rolling correlation between Bitcoin and the S&P 500 has averaged approximately 0.30. However, this average masks significant regime shifts:

• The 30-day rolling correlation spiked to 0.74 in March 2026, its highest reading of the year
• In late 2025, the 30-day correlation dropped to -0.30, indicating a period where Bitcoin and stocks moved in opposite directions
• The correlation tends to spike during macro-driven selloffs (when both assets fall together) and decouple during crypto-specific rallies

Institutional adoption has increased the baseline correlation. The launch of spot Bitcoin ETFs in January 2024 integrated Bitcoin more deeply into traditional financial plumbing: BlackRock's IBIT fund reached approximately $100 billion in AUM within 435 days, the fastest any ETF has reached that milestone. As more institutional capital flows into Bitcoin through familiar vehicles, shared macro sensitivity (Fed rate decisions, risk-on/risk-off cycles) drives the two assets closer together during stress periods.

Three notable decoupling periods illustrate that the correlation is cyclical, not permanent: in mid-2019 Bitcoin rallied 62% while the S&P 500 declined 6.5%; in Q4 2020 through Q1 2021 Bitcoin surged 300% versus 12% for equities; and in 2023 Bitcoin returned 156% while the S&P 500 returned 26%.

Bitcoin in a Traditional Portfolio

The case for a small Bitcoin allocation in a diversified portfolio rests on its asymmetric return profile: even a 1-5% allocation can meaningfully impact total portfolio returns because Bitcoin's upside in strong years is so large relative to the allocation size.

Multiple institutional studies have examined the impact of adding Bitcoin to a standard 60/40 portfolio (60% equities, 40% bonds):

• A Hashdex study covering January 2014 to March 2024 found that a 2% Bitcoin allocation increased average annual portfolio returns by 1.9 percentage points with only 0.14% additional volatility
• Fidelity-cited research found that a 5% Bitcoin allocation with quarterly rebalancing increased the portfolio Sharpe ratio from 0.63 to 1.15 over 2014-2023
• A Nika Finance analysis (December 2012 to September 2024) showed that a 1% allocation lifted cumulative returns from 199% to 231% without increasing maximum drawdown
• Morningstar research (May 2016 to November 2025) found that even a 1% crypto allocation contributes 3-5% of total portfolio risk, and a 2% allocation contributes 7-13%, which they identified as the practical boundary for conservative portfolios

Key takeaway: Research consistently identifies 2-5% as the range where Bitcoin's return contribution outweighs the incremental risk. Beyond 5%, drawdown risk begins to dominate portfolio behavior.

Quarterly rebalancing is critical to capturing this benefit. Rebalancing forces the portfolio to sell Bitcoin after large rallies (locking in gains) and buy during drawdowns (lowering cost basis). A DCA calculator can help model the effect of regular purchases across different market conditions.

For investors already holding Bitcoin, the ecosystem continues to expand beyond simple buy-and-hold. Layer 2 protocols like Spark enable instant, low-cost Bitcoin transactions and access to dollar-denominated stablecoins on Bitcoin, which can be useful for portfolio rebalancing without moving funds off the Bitcoin network.

Frequently Asked Questions

Has Bitcoin outperformed the S&P 500?

Over any 10-year holding period that has completed so far, yes. From the end of 2015 to the end of 2025, Bitcoin delivered a compound annual growth rate of approximately 70%, compared to roughly 13% for the S&P 500. However, over shorter windows the answer depends heavily on timing. In 2022, Bitcoin fell 65% while the S&P 500 fell 18%. In 2025, the S&P 500 returned +17.9% while Bitcoin lost 6.3%. Bitcoin has outperformed dramatically on a long-term, buy-and-hold basis, but with far greater interim pain.

What is Bitcoin's Sharpe ratio compared to the S&P 500?

According to Fidelity Digital Assets, Bitcoin posted a Sharpe ratio of 0.96 from February 2020 to early 2024, compared to 0.65 for the S&P 500 over the same period. This means Bitcoin generated more return per unit of risk despite its higher volatility. However, Sharpe ratios are highly period-dependent: during bear markets, Bitcoin's Sharpe ratio can turn sharply negative.

How volatile is Bitcoin compared to the S&P 500?

Bitcoin's annualized volatility over 2015-2025 was approximately 54%, compared to 13% for the S&P 500: roughly a 4:1 ratio. Bitcoin's volatility has been declining structurally over time, from over 200% annualized in its early years to the 45-55% range in recent cycles. By late 2023, Bitcoin was less volatile than 92 individual S&P 500 constituent stocks, according to Fidelity research.

Should I add Bitcoin to my investment portfolio?

Multiple institutional studies suggest that a 1-5% Bitcoin allocation in a diversified portfolio has historically improved risk-adjusted returns. A Hashdex study found that a 2% allocation increased annual returns by 1.9 percentage points with minimal additional volatility. The optimal allocation depends on your risk tolerance, investment horizon, and ability to hold through 70%+ drawdowns without selling. This content is informational and does not constitute financial advice.

Are Bitcoin and the S&P 500 correlated?

The 90-day rolling correlation has averaged about 0.30 over the past five years, which is moderate. Correlation spikes during macro-driven selloffs (reaching 0.74 in March 2026) and drops during crypto-specific rallies (falling to -0.30 in late 2025). The launch of spot Bitcoin ETFs in 2024 has increased the baseline correlation by integrating Bitcoin more deeply into institutional portfolio flows.

What is Bitcoin's worst drawdown?

Bitcoin's largest peak-to-trough drawdown was approximately 94% in 2011, when it fell from $32 to $2. In more mature markets, the worst drawdown was 86% during 2013-2015. The most recent major drawdown (2021-2022) saw a 78% decline from $69,044 to $15,476. By comparison, the S&P 500's worst drawdown since 2000 was 56% during the 2008-2009 financial crisis.

How does the Bitcoin halving affect returns relative to the S&P 500?

The Bitcoin halving, which cuts the block subsidy in half approximately every four years, has historically preceded 12-18 month periods of strong price appreciation. The April 2024 halving was followed by a 121% gain for the full year. However, the halving is a supply-side event with no equivalent in equity markets, so its predictive value for future cycles remains debated. For details, see our halving economics analysis.

This tool is for informational purposes only and does not constitute financial or investment advice. Historical returns do not guarantee future performance. Data is approximate and based on publicly available information including year-end closing prices and published research from Fidelity Digital Assets, Hashdex, and Morningstar. Bitcoin and S&P 500 returns are highly sensitive to the start and end dates chosen. Always verify current data and consult a qualified financial advisor before making investment decisions.