Amazon vs. Bitcoin: They're Worth Roughly the Same, But One Is Better Than the Other

"With a market capitalization of more than $2.1 trillion (it was higher just a few weeks ago), Bitcoin (CRYPTO:BTC) is clearly a top asset on the minds of many investors. There are certainly reasons why those seeking greater portfolio diversification may be looking at Bitcoin, either via holding tokens directly or assessing whether a spot or futures-linked ETF is worth considering."

"But I thought I'd do something in looking at Bitcoin, and compare this asset class to some of the most consistent growth stocks out there, and see which will ultimately be the better pick for the average investor over a certain time frame. I've picked Amazon (NASDAQ:AMZN) as a decent proxy, given the fact that the e-commerce and cloud computing giant has a very similar market capitalization (currently $2.18 trillion at the time of writing)."

"Whether you've taken a traditional finance course or not, most investors can intuitively understand that volatility equals risk. In other words, the larger the percentage moves in a given asset on a day to day, week to week, or year to year basis, the higher the risk profile of such an asset relative to others. These swings, in which investors can either pocket massive gains (or incur massive losses) is what can drive outsized alpha over an extended period of time."

"Such has been the case with Bitcoin, with this leading cryptocurrency's valuation skyrocketing a mind-boggling 171,200,000% since its inception a little more than 15 years ago (that's not a typo). Amazon's return over the past three decades of roughly 275,000% certainly isn't bad. But these are two very different numbers, and there's reason why growth investors often choose one over the other."

Bitcoin and Amazon have comparable market capitalizations near $2.1 trillion, making them large options for investors seeking diversification. Bitcoin offers extreme volatility and the potential for outsized long-term gains, having increased about 171,200,000% since inception. Amazon has delivered substantial multi-decade growth of roughly 275,000% and generally provides steadier returns over shorter periods. Volatility equates to risk, with larger percentage swings producing both large gains and losses. Investors must weigh higher-risk, high-reward potential of Bitcoin against Amazon's more consistent growth profile when choosing allocations or combining both in a diversified portfolio.

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