The Great Depression - A Bitcoin what if
What if Bitcoin were around during the Great depression? How would it fare against Stocks or Real Estate over a 5 year time horizon. The following calculations forecast against these 3 in a hypothetical scenario where an investor in 1929 invests $10 in each asset class and where their investment stands five years later.
(Adjusted for inflation, $10 from 1929 would be worth approximately $175.93 in fiat USD today (2024).)
Investment Type | Initial Investment | ARR% | Value after 5 years | Total Return % |
Stocks | $10 | -20% | $3 | -67% |
Real Estate | $10 | -10% | $6 | -41% |
Bitcoin | $10 | 30% | $37 | 271% |
Stocks:
ARR: -20%
Initial Investment: $10
Value after 5 years: $3.28
Total Return: -67.23%
Real Estate:
ARR: -10%
Initial Investment: $10
Value after 5 years: $5.90
Total Return: -40.95%
Bitcoin (hypothetical):
ARR: 30%
Initial Investment: $10
Value after 5 years: $37.13
Total Return: 271.29%
These calculations illustrate the severe impact of the 1929 stock market crash and the Great Depression on traditional investments, while a hypothetical Bitcoin investment demonstrates significant positive returns. Obviolusly theres a lot of variables unaccounted for (i.e. computers didn't exist en-masse at this time) but its a fun exercise to see how these hypothetical assets might fare during difficult economic times, like the great depression.