Bitcoin vs Gold vs S&P 500

Decisively. From 2016 to 2026, Bitcoin's compound annual growth rate was approximately 63.8% in CAD terms while gold returned roughly 9.1% per year. A $10,000 Bitcoin position in January 2016 would be worth approximately $420,000 today. The same $10,000 in gold would be worth roughly $23,800. Bitcoin's outperformance comes from its fixed supply schedule, network effects, and adoption curve — not speculative enthusiasm alone.

The Sharpe ratio compares return to volatility — higher is better. Over the 2013–2025 period, Bitcoin's Sharpe ratio (approximately 0.95) has outpaced both Gold (0.62) and the S&P 500 (0.73), meaning Bitcoin has delivered more return per unit of risk taken. However, Bitcoin's absolute drawdowns are far larger — a 76% peak-to-trough loss in 2022 versus Gold's 35% and the S&P 500's 34%. Risk-adjusted return and maximum drawdown tell different parts of the story.

Bitcoin has dramatically outperformed the S&P 500 over every meaningful time horizon — 1-year, 3-year, 5-year, and 10-year. A $10,000 investment in Bitcoin at the start of 2013 would be worth approximately $1,040,000 by mid-2025. The same $10,000 in the S&P 500 would be worth approximately $34,600. That's a 30x difference over 12 years. The S&P 500 has never had a down decade; Bitcoin has had two (2010s and 2020s would both be up years, but with much larger drawdowns in between).

Bitcoin's worst drawdown from its 2021 peak ($69,000) to its 2022 trough ($16,425) was approximately 76%. Gold's worst drawdown over the same period was approximately 35% (from $2,067 in March 2022 to $1,627 in late 2022). The S&P 500's worst drawdown in 2022 was approximately 25%. For context: Bitcoin's 2014 drawdown from its 2013 high was approximately 85%. All three assets recovered, but the ride quality differs substantially.

Bitcoin ETFs like BTCC.B and FBTC are now tradable commission-free in TFSAs and RRSPs at most Canadian brokerages. Holding Bitcoin inside a TFSA means all gains are permanently tax-free — a significant advantage over taxable accounts where capital gains are taxed at your marginal rate with a 50% inclusion rate. Gold ETFs (like HOU on the TSX) offer similar TFSA/RRSP access but with much lower return potential. The TFSA Bitcoin allocation question is less about asset class choice and more about what percentage of your TFSA room you want to allocate to a higher-volatility, higher-returning asset.