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itcoin has outperformed other asset classes over the past decade, but its volatility is significantly higher. A recent post on X by macro investor Krueger compared Bitcoin's nominal and inflation-adjusted returns from 2014-2024 to those of the S&P 500, Nasdaq, gold, U.S. real estate, and 10-year Treasury bonds. Assuming a 7% "true" inflation rate and 20% capital gains tax, Bitcoin's 46% real return far surpassed its competitors: Nasdaq (+4%), S&P 500 (+2%), Gold (+0.5%), U.S. real estate (-1%), and 10-year Treasury (-4%). Krueger advised investors to "pick the right weapon," arguing that Bitcoin has been the clear winner.

    Some respondents countered that Ethereum could also be a strong long-term play, while others noted gold's hedge value remains intact despite its limited upside. Prominent trader Adam Bakay agreed that Bitcoin has proven itself as a strong macroeconomic asset but warned of its higher volatility compared to the S&P 500 or Nasdaq. He suggests allocating a portion of one's portfolio to BTC, especially given ETF success and rising government interest.

    However, Bakay also cautioned investors about the potential for sharp drawdowns, citing Bitcoin's 40% historical annual swings. If an investor can't tolerate a 40% loss, they're overexposed, he advised, recommending balancing Bitcoin with safer assets like gold or Treasury bonds. While acknowledging Bitcoin's strong two-year trend, Bakay expects momentum to slow toward year-end, though uncertainty remains around timing.