If you bet $10,000 on BlackRock’s Bitcoin ETF (IBIT) at its launch, it’s now worth $19,870, nearly double the returns of the S&P 500 and Nasdaq 100, and outpacing the incredible rise in gold itself.
But this 98.7% return obscures the bigger picture, with IBIT holders sitting on returns of over 150% for several months in 2025 and watching their original stake balloon past $25,000 until Bitcoin recently dropped below six digits and that gain was reversed.
Measured over the 22-month period since IBIT’s inception on January 5, 2024, this comparison is not close.
The S&P 500 and Nasdaq 100 both achieved respectable returns of 42-43%, an impressive feat considering they have recorded back-to-back returns of 25% or more, a rare occurrence that has only happened three times since 1871.
Gold, driven by geopolitical unrest and central bank buying, came closest with gains of 92-93%. But Bitcoin’s trajectory has taken a very different path, defined less by stable compounding and more by wild swings that reward conviction and punish hesitation.
The peak that was not
By Sept. 30, the same $10,000 IBIT position had reached about $25,000, representing a 150% return in less than two years, according to BlackRock’s SEC filing.
By then, Bitcoin was trading near $115,000 per coin, IBIT stock was hovering around that level, and the narrative shifted from “institutional adoption” to “How high can this go?”
The 2.5x milestone signified not just an arithmetic success, but psychological vindication for allocators who had endured skepticism about crypto’s place in portfolios governed by Sharpe ratios and correlation matrices.
Then October came around, Bitcoin hit an all-time high of over $126,000, and the price of IBIT stock was $71,29, before falling on a short-term holder cost basis.
The move triggered a cascade of liquidations across futures markets, with leverage amplifying the rally fueling the decline.
At the time of writing, Bitcoin is trading at $96,612.79 and IBIT is trading at $54.84, making the September highs look like a mirage.
The drawdown from the peak wiped out about $6,000 in paper value for every $10,000 originally invested, a reminder that Bitcoin’s uncorrelated returns are declining in both directions.
What was missing from the benchmark?
Stock indexes had a textbook performance. The S&P 500 achieved double-digit gains for the third year in a row, and the Nasdaq 100, driven by the “Magnificent Seven,” saw profits increase by an average of 21.6% year over year.
Both suffered manageable drawdowns and traded within established ranges, validating decades of mean reversion research.
Gold’s 52% year-to-date rally through November 2025 was driven not by speculative mania but by macroeconomic turmoil driven by tariff uncertainty, Fed suspension moves, and record central bank purchases. The correlation with stocks remained negative, fulfilling the role of the portfolio as designed.
IBIT offers none of that predictability, with a 98.7% return since inception coming from single-asset bets on a protocol with no inherent cash flow for returns, dividends, or discounts.
The same volatility that allowed for a 150% peak also allowed for a 25% collapse in a matter of weeks. Traditional risk models classify that profile as unacceptable, and traditional risk-adjusted returns penalize the path, even if the destination is known.
But the path is less important than the outcome of the capital invested at the start.
Investors who bought IBIT on day one and held it through the September peak, November pullback, and all subsequent liquidation cascades outperformed all major benchmarks by enough margins to overcome transaction costs, tax resistance, and multiple doubts.
This investor also experienced standard deviations in returns that made compliance officers cringe and risk committees demand an explanation.
Leverage layer below
IBIT’s performance not only reflects Bitcoin’s rising price, but also the infrastructure built around crypto as an asset class.
The approval of Spot ETFs removes the storage risk for institutions allergic to private keys and hardware wallets.
BlackRock’s brand provided the regulatory air cover. The CME CF Bitcoin Reference Rate provided auditors with a defensible benchmark.
These developments have transformed Bitcoin from “digital gold held by ideologues” to “traceable exposure tradeable through Schwab.”
This wrapper was important when Bitcoin tested six numbers. The $1.2 billion inflows into ETFs exited in November do not represent panic, but rather rebalancing, profit-taking, and tactical repositioning by allocators who can treat Bitcoin like any other liquid asset.
The same pipe that brought $37 billion into IBIT in its first year drained nearly $900 million in one day, November 13, without destroying the market.
Liquidity is a tax that experts pay for access, and IBIT’s structure efficiently collects that tax.
The futures market told the rest of the story. Open interest ballooned to $235 billion by mid-October, but narrowed as long positions were unwound. Funding rates remained subdued as prices tested support, indicating traders were de-risking rather than doubling down.
The option skews the put in favor of implied volatility by 11% by pricing protection against a test below $100,000 that arrives as expected.
Infrastructure could not protect against volatility. It simply made volatility tradable and insurable, and therefore acceptable to capitals that demand both.
Benchmarks that refuse to act
Comparing IBIT to the S&P 500 or Nasdaq 100 assumes they are solving the same challenges, but that is not the case.
Stock indexes provide exposure to aggregate growth in corporate earnings diversified across sectors, with governance structures and disclosure requirements that reduce downside risk.
IBIT provides exposure to fixed supply currency protocols with no recourse, no management removals, and no analysis of quarterly guidance. The former is amplified by dividend reinvestment and multiple business expansions, while the latter is amplified by network effects and an adoption curve that shows whether the theory is valid.
Gold is closer to that spectrum, with no cash flows or returns, but is valued due to its scarcity and institutional acceptance. However, gold’s 5,000-year history as a store of value gives it mean-reverting properties that Bitcoin lacks.
If gold rises 50% in one year, it is assumed that it will revert to its long-term average. When Bitcoin rises 150%, the assumption is either a paradigm shift or speculative excess, but there is no consensus on either.
This uncertainty is the premium that IBIT investors pay for asymmetry.
The 98.7% return since inception, October peak, and 25% drawdown since then all reflect the fact that Bitcoin volatility is an inherent asset characteristic and not a bug that can be removed by design.
The institutions that purchased IBIT were aware of this. We made up for that patience with 19 months of outperformance against traditional benchmarks.
Whether that trade continues to work depends less on Fed policy or ETF flows than on whether the volatility is determined to be worth the option value embedded in programmatically scarce non-sovereign assets.
For investors who invested $10,000 in IBIT at its inception and now have $19,870, the answer is already clear.
For someone who sold for nearly $25,000 in September, the answer is even more accurate. And for allocators running Monte Carlo simulations about the role of cryptocurrencies in 60/40 portfolios, the question remains open. And this is exactly why the earnings appear like this.
(Tag translation) Bitcoin
