Annualised return (CAGR)
“Up 80%” means something very different over eighteen months than over five years. Annualising is how the two become comparable.
What CAGR is
The compound annual growth rate is the single steady rate that would have produced the same end value: (end ÷ start)1/years − 1. It is a summary, not a description — almost nothing actually grows at a constant rate, least of all crypto.
What it hides
CAGR is blind to the path. Two holdings with identical CAGR can have had completely different drawdowns, and the one that fell 80% along the way was a very different thing to hold. Read it alongside the loss recovery figures rather than on its own.
What this does not model
Deposits and withdrawals during the period. If money moved in or out, CAGR on start and end values is wrong, and you need a money-weighted return instead.
