Crypto vs Stocks: Bitcoin & Tech in the Digital Era
We measure Bitcoin, Nvidia, Apple and the Nasdaq against money supply growth to settle crypto vs stocks, and to see how much faster tech built real wealth.
Topic
The Stock Market Against 100 Years of Money Printing
Ask whether the stock market beats inflation and the honest answer from our data is that it depends on the dividends.
Read more
On price, the S&P 500 went from an annual average of 13.40 in 1926 to over 6,276 in 2025, a 468-fold rise, against 503-fold growth in M2 from the St. Louis Fed’s figures, so the index alone came up about 6.8% short. With dividends reinvested, as Part III shows, it was a very different result.
- 468x S&P 500 on price, 1926 to 2025 An M2-adjusted value of 0.932, about 6.8% behind M2.
- 292x Dow Jones, 1926 to 2025 Lost more than 40% of its value relative to M2.
- 6.1x S&P 500 total return, 1965 to 2025 M2-adjusted at 10.0% a year over the same 60 years.
Articles on Stock Market
3 articles from our research on this topic.
Warren Buffett Returns, Berkshire Hathaway Performance & IPO Winners
Warren Buffett's returns at Berkshire Hathaway came to 1,027x after money printing over 60 years. We compare them with Walmart, Nike and other IPO winners.
Stocks vs Inflation: Does the Stock Market Beat Inflation? Avoid the Savings Trap
We test whether the stock market beats inflation once money printing counts, using the S&P 500's 468x rise since 1926 and savings that fell to 4.3 cents.
Plain-English definitions
Key terms for stock market
- Total return
- Price growth plus every dividend, rent payment or coupon put back into the investment, as opposed to price alone.
- M2-adjusted value 1.0 = break-even
- An asset’s growth divided by M2 growth over the same years. Above 1.0 it gained share of the money pool, below 1.0 it lost share.
- Quantitative easing
- Central bank buying of bonds with newly created money, used heavily after 2008 and again in 2020. It adds directly to the money supply.
- Survivorship bias
- Judging a strategy by the winners that are still around while forgetting the companies that failed or were delisted along the way.
FAQ
Questions about stock market
Answers drawn from the figures in our research. Educational only, not financial advice.
Do stock market crashes follow changes in the money supply?
Often, in the data we used. For Part II we put the St. Louis Fed’s annual M2 growth rate from 1926 to 2025 on one chart with the recessions and big market falls marked, and most of the crashes came after M2 growth had slowed or slipped below its long-run average of 6.66% a year.
The recoveries tended to arrive with new money, first the quantitative easing after 2008 and then the $4.8 trillion added in 2020 and 2021, when M2 grew at an annualised 19%. Indexed to January 2019, M2 rose 1.52x and the S&P 500 2.6x, so we read a good part of the COVID rebound as prices adjusting to the extra dollars, although we wouldn’t claim money supply explains every fall.
How does the stock market compare with picking individual shares?
The index did better than most people who tried to beat it, in the figures we gathered for Part IV. From 1965 to 2025 the S&P 500 with dividends reinvested came to 6.1x after adjusting for M2, about 10% a year, enough to turn $10,000 into roughly $3 million.
Walmart and Berkshire Hathaway each cleared 1,000x over similar spans, which is why we looked at them closely, but Jay Ritter’s IPO data says 30-35% of new listings go to zero or are delisted within 10 to 20 years and only 10-15% beat both the index and M2.
Dalbar puts the average retail investor at about 5% a year, under the 6.56% hurdle. To do better than the index you had to find one of the few winners at listing and then hold it through several crashes without selling, and we doubt many people would have managed that without hindsight.
Sources