The appeal of cryptocurrencies lies of their growth potential and talent to diversify a portfolio, but they arrive with wild price fluctuations and unsure long-term outcomes. The key query will not be only whether it increases returns, but additionally whether it matches your risk tolerance and overall strategy.
For investors who need to explore the space, there are platforms like Coinbase have helped make buying, selling and holding cryptocurrencies more accessible in Canada.
BTC has outperformed the stock market in 7 of the last 10 years
As the table below shows, since 2016, BTC has outperformed the S&P 500 (US stock market index), the S&P/TSX Composite (Canadian stock market index), and gold in seven of the last 10 calendar years. The scope for outperformance can be not small. In 2024 – the last yr with BTC outperformance – BTC outperformed the S&P 500 by 97.74 percentage points.
Of course, BTC’s moves in each directions are exaggerated; When performance is subpar, this happens quite dramatically. For example, BTC has fallen 44.83 percentage points greater than the S&P 500 in 2022.
| Year | BTC % change | S&P 500% change | S&P/TSX Composite % Change | Gold % change | Top performers |
|---|---|---|---|---|---|
| 2025 | (6.34) | 16.39 | 28.93 | 64.69 | Gold |
| 2024 | 121.05 | 23.31 | 17.98 | 27.23 | BTC |
| 2023 | 155.42 | 24.23 | 8.12 | 13.08 | BTC |
| 2022 | (64.27) | (19.44) | (8.66) | (0.23) | Gold |
| 2021 | 59.67 | 26.89 | 21.74 | (3.51) | BTC |
| 2020 | 303.16 | 16.26 | 2.17 | 24.43 | BTC |
| 2019 | 92.2 | 28.88 | 19.13 | 18.83 | BTC |
| 2018 | (73.56) | (6.24) | (11.64) | (1.15) | Gold |
| 2017 | 1368.90 | 19.42 | 6.03 | 12.57 | BTC |
| 2016 | 123.83 | 9.54 | 17.51 | 8.63 | BTC |
Portfolio performance by calendar yr
With BTC’s outperformance in mind, below is a comparison of the approximate calendar yr returns of two hypothetical multi-asset portfolios – we’ll call them A and B. Portfolio A contained a 5% allocation to BTC and B contained no BTC. Here is the composition of each:
- Portfolio A: 40% S&P/TSX Composite, 40% S&P 500, 15% Gold, 5% BTC
- Portfolio B: 40% S&P/TSX Composite, 40% S&P 500, 20% Gold, 0% BTC
Below is a table (and chart) comparing the performance of those portfolios in each of the last 10 calendar years:
| calendar yr | Portfolio A (Percentage Return with 5% BTC) | Portfolio B (Percentage return without BTC) |
|---|---|---|
| 2025 | 27.51 | July thirty first |
| 2024 | 26.65 | 21.96 |
| 2023 | 22.67 | 15.57 |
| 2022 | (14.49) | (11.29) |
| 2021 | 21.91 | 18.75 |
| 2020 | 26.19 | 12.26 |
| 2019 | 26.64 | 22.97 |
| 2018 | (11.00) | (7.38) |
| 2017 | 80.51 | 12.69 |
| 2016 | 18.31 | 12.55 |
As the table and chart above show, a portfolio with a 5% BTC allocation would have outperformed a portfolio with no crypto exposure in seven of the last ten years. This explains why some investors consider a small allocation.
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But past performance doesn’t tell the entire story. Bitcoin is a particularly volatile asset whose prices can fluctuate significantly over short periods of time. Any potential upside should be weighed against the danger of great declines and whether that level of uncertainty matches your overall investment plan.
BTC is a mature asset, not a gaming chip
As the crypto market matures and attracts more institutional investors, the market is starting to point out signs of accelerating stability, including a decrease in volatility.
As the chart below shows, BTC’s 30-day annualized volatility has fallen from a peak of about 158% in 2018 to its current value of just over 40% on April 20, 2026.
From a unique perspective, the chart below shows Bitcoin’s volatility relative to its market cap over time. While the chart reflects data through 2024, recent market activity continues to support the identical trend: as Bitcoin’s market cap has increased, its volatility has generally decreased. This pattern helps explain why BTC has attracted increasing interest from some Canadian investors.
However, it is crucial to do not forget that BTC stays a particularly volatile asset and sharp price fluctuations are commonplace.
Crypto beyond BTC
In the sections above, I advocated allocating a small portion of your portfolio to by far the most important cryptocurrency, BTC. But what concerning the other cryptocurrencies like Ethereum (ETH), Solana (SOL) or XRP, all of which could be bought and sold through platforms like Coinbase that provide access to a variety of digital assets?
