Updated: 06/29/2016 14:02
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See the overview of the Compound Annual Growth Rate CAGR shown by Cointon during past three years, compare with CAGR of alternative investments
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See the overview of the Compound Annual Growth Rate CAGR shown by Cointon during past three years, compare with CAGR of alternative investments

Investing to Bitcoin is not for the faint-hearted ones, however in the longer term it can give substantial profit. As a matter of fact one could get annual profit of around 82% within last three years. It is not easy though to measure Bitcoin as the investment tool. In part it is explained with the fact that the cryptocurrency doesn't exist in a traditional physical way, which is annoying for the majority of people. Though mainly there appear difficulties because of such a well-known Bitcoin volatility.

Even casual observers can remember the Autumn of the year 2013, when the price on Bitcoin emerged from abotu $100 to the level of more than $1200. A little bit more than a year after the price on Bitcoin fell down again below $200. The Bitcoin volatility doubled during the previous month. From about $450 on May 24 it grew to $775 and then fell down again to $560 on June 23.

Investing to Bitcoin

An amazing Brexit vote result last week contributed to the new splash of the Bitcoin price to about $680, since this cryptocurrency gained traction as the safe investing zone. This week Bitcoin remains in the range of $650, though there is a dispute concerning the length of the period and its duration. Namely the volatility has become the main reason why such a financial tool as the "Compound Annual Growth Rate" (CAGR) was created.

CAGR is the mean annual growth rate of an investment over a specified period of time longer than one year. Using CAGR shows investing to Bitcoin three years ago was a smart move (the year of 2013 is used as a reference point, for during that period of time Bitcoin started to attract much of attention.) During the previous three years Bitcoin CAGR made 81.71% (to compensate recent volatility the current price of $600 used, which is the average price for the last five weeks.)

Bitcoin Investment Slap to Alternative Investment Objects

So speaking of stock exchanges the CAGR of Standard & Poor's 500 during last three years has been at the mark of 8%. Not bad at all, though the fact remains. The three-year CAGR of the American real estate makes 5.68%. CAGR for SPDR Gold Trust (NYSE Arca: GLD), exchange traded fund, based on the gold price is just 1.65% even despite the Brexit influence.

Obviously none of investment classes can even try to compete with Bitcoin. In regards to stocks, out of 6000 stocks, traded in the major US stock-exchanges, only 13 have the three-year CAGR higher than Bitcoin rate. It would certainly be stupid to put all your assets to Bitcoin (or any other single investments), which would potentially bring CAGR more than 80%, for one should always remember no past performance can secure future success.

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