00:00Bitcoin versus gold, real estate and the S&P 500.
00:04So let's talk about what's really won the race over the last 10 years.
00:09Most people tend to compare Bitcoin, gold, real estate and the S&P in the worst possible way, right?
00:16So they peak the perfect start date, the perfect chart, and then they pretend that they found some kind of
00:21truth.
00:21And gold investors start during a crisis.
00:24You see stock market investors starting to look at the charts after a particular crash or real estate investors, including
00:31leverage, but ignore kind of the maintenance, the taxes and the illiquidity as well of the asset.
00:36And then you have on the other side, the Bitcoin bulls that start the cycle at the bottom and the
00:43critics that look at it from kind of where the cycle tops.
00:48And that's not really good analysis at the end of the day.
00:51So in this video, what we're asking is a much better question, which is over the last 10 years, which
00:56asset actually did the best, whether that's Bitcoin or gold, real estate or the S&P, right?
01:01So the answer is a little bit more interesting than just saying Bitcoin won, right?
01:06Because yes, Bitcoin did dominate the decade in terms of just the total returns, but the S&P 500 was
01:12the most reliable traditional compound as well as gold, the remaining kind of the monetary insurance as we've seen over
01:20the last year or so, as well as real estate working well for the right buyers, but not always in
01:26the way that people pretend.
01:28So let's break it all down. The first thing to understand is that these assets are not designed to do
01:33the same job.
01:34Bitcoin is a scarce digital monetary asset and gold is ancient and seen more as an insurance, right?
01:42So real estate, on the other hand, is a physical income producing and leverage friendly, as well as the S
01:48&P 500 being more of a diversified bet on American corporate earnings.
01:54So the real question is simply not which asset is the best, but the real one is looking at which
02:00asset actually worked best for investors over a time period with the level of risk considered.
02:06And also because if you needed your money in the last three years, Bitcoin would have been probably a much
02:12brutal investment to be in.
02:14But if you held the full, let's say 10 year cycle, then it's almost impossible to ignore.
02:20So that difference matters. So let's start with the three year test, right?
02:24So this is where Bitcoin can be both amazing and a little bit dangerous over the last three year window.
02:29It crashed traditional assets in terms of returns, but someone bought near the euphoric top and they could have spent
02:37years underwater.
02:38And that's the uncomfortable truth about Bitcoin that we have to admit for sure.
02:43And it's not automatically superior over a short time horizons, right?
02:47So the S&P is usually more forgiving because it is diversified across hundreds of companies and supported by earnings
02:54and dividends and buybacks and also institutional capital.
02:58And gold can perform well during those fear driven periods, especially when investors are worried about war, inflation or currency
03:06weakness or central banks.
03:07So real estate can also feel stable because your house does not sort of flash a live price feed every
03:16second, right?
03:17But listed, the real estate or, you know, that kind of for sure, property linked assets can fall harder when
03:25interest rates rise.
03:26So for that three year investor, the verdict would be simple for that investor.
03:30The Bitcoin offers kind of the highest upside, but also the highest emotional risk and the S&P 500 being
03:37kind of the more best consistent and gold as a crisis hedge in real estate, depending on heavily kind of
03:45the interest rates of the time and the leverage and also the location that you're in.
03:49So if we stretch that over a time frame of, let's say, five years, this is where Bitcoin becomes much
03:54more of a stronger case because it moves in cycles, right?
03:57So someone who buys near the top may suffer for two to three years.
04:00But historically, the cycle has often kind of rewarded those investors who kept holding, kept accumulating and did not panic
04:07sell.
04:07And this is where it's not just a normal trade.
04:10It's more kind of a psychological test.
04:13The people who did best were not always the smartest traders.
04:16They were the people that avoided leverage, held through those crashes, secured their wallets, ignored panic headlines and also treated
04:23Bitcoin as a multi-cycle asset, right?
04:26And the S&P 500 still remains kind of a smoother over the five-year window as well.
04:32When you look at the stats and the gold, it still depends heavily on the overall macro environment and real
04:37estate, definitely still depending on the rates and also financing in the real estate sector.
04:42But Bitcoin five-year historically performs exactly why, you know, it's been one of those assets that's attracting institutions now.
04:51And now if we get to kind of find the big one over the last kind of 10-year cycle,
04:56Bitcoin is then seen clearly as the winner in total returns.
05:00But obviously, the key point is not just Bitcoin won.
05:04It's how it won, right?
05:06Bitcoin has won by surviving these multiple 50-plus percent drawdowns, exchange collapses, regulatory pressure, media obituaries.
05:16You know, we've seen that over the last year or the last six months, you know, we've seen over 50
05:21percent drawdown, those liquidity crashes, the leverage wipeouts and the endless claims that it's dying.
05:27But of course, it didn't win because it was safe, right?
05:31It also won because of the adoption curve, the scarcity, the monetary premium that expanded faster than the market could
05:38actually price.
05:39And that is simply, I think, the core lesson I wanted to just convey here.
05:43The S&P 500 had a strong last 10 years too, especially when dividends were actually reinvested in gold.
05:50Definitely did preserve value and mattered during those stress periods.
05:54And real estate rewarded certain owners, especially those with cheap debt and good locations.
06:00But in liquid market terms, Bitcoin is the ultimate return winner, right?
06:05The honest 10-year verdict is that Bitcoin has definitely won the race.
06:10The S&P has won the reliability race, right?
06:13But gold has won that race of being kind of the insurance instrument.
06:18And of course, real estate, if, you know, you're not wiped out by the leverage and you've got the right
06:26properties in the right places and the right cash flow.
06:29And I think traditional investors often say that, you know, Bitcoin returns do not matter because of volatility, which is
06:36a little bit insane.
06:37And of course, it's highly volatile.
06:40But that argument is not complete.
06:42Volatility definitely matters.
06:44It's not the only measure of risk.
06:47If an asset is extremely volatile but produces the returns enough to compensate investors for that volatility, it's risk-adjusted.
06:54And the case is still strong for it.
06:57So that's why the metrics like the Sharpe ratio or the Satino ratio also matter, right?
07:02Because Bitcoin is not low risk.
07:05Historically, it has been the highest rewarder.
07:09And that distinction is very important for traders.
07:12Volatility will destroy you.
07:13For traders that are obviously leveraged investors, volatility will also affect you.
07:18But for sellers, the same.
07:20But if you're a long-term holder and you have secure custody, then the upside is pretty much worth the
07:27pain.
07:27If you want to check out the full guide and the full comparison, the stats, the charts, the link is
07:32in the description down below.
07:34Let me know your thoughts and like, share and subscribe.
07:36I'll see you guys next time.
07:38Peace.
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